Transcripts For CNBC Squawk Box 20150313

S p futures up by 20 points and the nasdaq is up by 7 points as well after gains yesterday. We have two economic reports of note. The february Producer Price index at 8 30 eastern time and then march Consumer Sentiment at 10 00. Also two retailers are set to post Quarterly Results before the bell. Well get the Parent Company of ann taylor and the buckle and then theres a labor dispute to discuss. This could end the strike. It accounts for 20 of the companys total capacity. Some stocks well be watching today that might be moving shares of ulta ulta salon getting a boost. The beauty retailers Quarterly Results were better on the top and bottom line. Quarter guidance was also better than expected. Ulta salon cosmetics. Its like a make up and cosmetics supplier. Andrew and i should know about it. Given that were good customers. Were going to talk to the companys ceo at 7 40 eastern and aeropostale team warning that shares will fall short of estimates and zumiez its Quarterly Earnings falling more than expected with higher costs offsetting and increase from sales. Meanwhile, i heard from these people. They tweeted. Were glad you like our food. The shares getting a boost and the Quick Service foods chains earnings and revenue beat the street and, you know a tweet is cheap. You were looking for chicken . Perhaps . You know were in the middle of manhattan. It wouldnt be that hard to find us. If they were disposed to send over chicken. You never had any. I havent. No. Neither one of you. Yes. Do you both like mexican food. Yes. The way you describe it sounds delicious. They wrap it in salsa but the chickens are cooked right there grilled and everything. You can see them. Whole. Not with the feathers but you can see at one time it was a well still is a chicken. Todays top story, federal process cue tors and the fbi probing manipulation of herbalife stock. Theyre said to have interviewed people hired by bill ackman. The wall street journal saying that the feds want to know if some people hired by ackman made false statements to regulators in order to encourage regulations into the company and there by lower the stock price. I spoke with him last night on a flight home from london. He was on the plane and he said the following in part. Im puzzled by the story. We have not heard from the fbi or department of justice. If they have any questions for me im happy to answer them. I stand by every statement i made about herbalife. The Company Never identified anything that we said that is false. He further went on to say he has not received a subpoena. He knows nobody that received subpoenas and he has obviously been very public and outspoken about his views so we know his views. I dont understand. He has said this is a scheme. What worse can you say about a company. Theres two elements of it. I made other calls to talk to people around the hoop on the legal side its not clear that theyre actually investigating him personally yet. It sounds like what is really happening is he has hired a group of lobby yiss. If they are more specific on things bill dunlt know what they said. We will have him on this program at 8 00 a. M. Live to talk about all of this. If i were going to try to hurt a stock or company i might start with it is a scheme would be a good start. In other circumstances he hired the former head of enforcement at the sec. Look i would argue its very hard to say that this that coming out and saying publicly that a stock is overvalued and heres why and its a scheme. That doesnt mean something is overvalued. It means youre paying off previous investors and theres no business there. Its not just saying its overvalued. What im saying is i would argue were going to talk to a lawyer in a second but legally you can make the argument. The issue is going to be what he did with the stock during this period or perhaps what really this is about is maybe there are people that ackman had hired who are making their own Stock Investments that we dont know about about. Youre allowed to buy and sell are you not . I would argue you said i would argue like 8 times already. The distinction may be and i dont know but the distinction could be his people have been in contact obviously with the government in ways that the public has not. You mean inside information. Well im just suggesting if you know more about what the government is doing or about to do do you have an obligation to not sell at that point . I dont know. Were going to find out. Hes too smart. Join us to talk about it. Jacob is here. You heard this conversation. Lets just start at the outset. When you think about market manipulation and what bill ackman has done thus far. Putting aside all the other details has what he has done constitute could it constitute market manipulation . It doesnt appear that way. Its all going to play out and another way to look at it is yelling fire in a crowded theater a violation of law. He said this is an absolute zero. He talked about the large position he has taken in the stock. The sole purpose of the communications and what he said publicly was for driving down the price of the stock. We know issuers hate short sellers so were looking at one of these battles at its most intensive level but in terms of what he has said so far, it may be border line manipulative but it does not appear to be stock manipulation because a lot of the statements hes making are general statements. But think about what happens in a small cap market too when theres a prediction that a company is absolutely a 20 stock when right now its 20 or 30 cents, youre describing what you analyzed among yourselves is exactly why the United States government is looking at this. The fts, the sec and department of justice but i do think its healthy when were so used to seeing the allegations of froud going on the upside to actually see an investigation also on the short side. I should add my understanding is this investigation is also in the context of a larger investigation or the same investigation of herbalife itself so theres parallel paths to this whole thing. Theyre hooking at whether they have their own problems and where he stands on it. In ways that were not privy too what are his allegations regarding trading understands that he might have information or a better understanding of where a government investigation might be than we might . Thats a great question because it really goes to in many respects the heart of what short sellers do and that is after doing Quality Research and being mindful the real quality short sellers do a lot of the work behind the scenes. It doesnt have this type of profile but theyre trying to get their message to the government to understand their analysis to why a company is not as strong as the Company Wants the public to believe. The fact that they have taken their positions and theyre known to the United States government its not likely that continuing to build are, in fact manipulative because the government is not telling the short sellers or those speaking on their behalf what they are doing. But just to make a fine point, if they keep taking additional meetings you would think that is good for your cause. If they stop taking your meetings you would take that as a sign that they are not investigating or pursuing the charges you laid out in the same way. If you were to close out that position would that constitute a problem . Its a great question. But youre talking about making analysis from inferences. The main fact that theyre not taking meetings or information is not a true indicator as to the status of the investigation. If i was a prosecutor and investigator i would stop talking to the person giving me information even if i was continuing that on my own. Dead on. Absolutely. Once you see this public play in trying to lead on that type of information and lobbying you should be shutting down the communication. What we have here lets go back at look at capital. They started with lower level people and worked all the way up. The sec capital did not get to steve on the criminal side. So you know the investigation is appropriately starting which is at the level of those who are communicating and theyre looking at whether there was any false information being given to the government for the purpose of helping to drive the stock because theres clearly an interest. But youre right and that is that what constitutes misleading . Lets say we dont know which way this is going to go. Lets say its not a scheme. Then is the entire campaign misleading . And it very well may be. Im not sure what it is anymore. Thats the question. Thats why we have seen volatility over the last two years between 20 and 80 a share which is an aberration and unnatural. I think to be fair hes not calling it i think hes calling it a pyramid scheme which is like pay to play. Theres payment to enter. See, this is thats the point. It doesnt make sense to me. Its like yes, we admitted to pyramid scheme but its not worth 60. Its worth 40. Its legally. But the company is not admitting that but there is not a Multilevel Marketing Company in existence that hasnt been the subject of complaints. And they have continued for a couple of years in business with somebody calling them a pyramid scheme openly again and again. And the reason theyre able to do that is because they have Real Products and People Choose from products and the whole nature of the multilevel Marketing Program is one that you often have people that step in that are unhappy, have bought product and decide they want to move on. These are challenges and the task for the government investigators is to sift. Is there something else. One thing over the years you made a point that most of the time you see people investigate hyping of stuff. Its a 30 cent stock they say thats going to 10. In our experience we always get mail from people that say how can you let someone come on and say bad things about a company when theyre short. They dont understand how see how thats any different. We constantly have people come on here and say stocks are cheap and they own the company. They say good things and they own the stock and people say yeah thats fine. The minute someone comes on here and says im short the stock and saying bad things people say you cant do that. It is weird that you would say you see more of the other than we see because immediately people dont think youre allowed to short a stock and say negative things about it. Well and i think it goes back to moets people dont understand there is a real and credible and place for short sellersst people dont understand, there is a real and credible and place for short sellers sellers. But theres a difference in those that do quality work and theres a case in new york a number of years ago. So basically, you want to avoid the overvalued pyramid schemes but have a strong buy on the undervalued pyramid schemes. The undervalued are a buy. As long as theyre undervalued. Got to get in early. Got to get in early. Ground floor. If youre one of the first people in the scheme. Then its great for you. You can be a leader. You think like a lawyer. Its in your blood i think. He grew up in a family where his fathers a lawyer. Its okay if its a pyramid scheme. Youre just calling it an overvalued pyramid scheme. Thats insane. Thank you jacob. Jacob is right. Every Multilevel Marketing Company in history has been called a pyramid scheme by somebody. But youre not allowed to do that i dont think. The difference is a lot of these things do benefit by getting more people involved. Thats where it is. Look, we changed it to a madolf scheme. He did it up in the billions. Thats actually see thats the difference between i think a pyramid scheme and madolf scheme. Theres nothing underlying. Lets remind our viewers again, 8 00 live eastern right here dont miss this because bill ackman will join us live on squawk box to talk about all of this and more. Hell be ready. Lets get to the broader markets. Joining us on set is the head of Global Equity research and a member of the squawk platinum portfolio. Thanks for being here this morning. Thanks for having me. Its been an up and down roller coaster ride to the markets over the last week or so . Anything that concerns you about this . Anything that makes you think theres buying opportunities as a result. Were optimistic on u. S. Equities this year. But we see valuations as getting stretched and volatility in the market. And you tend to see a lot of volatility. We think that could happen as early as this summer and if you look at history markets tend to peak about 3 to 4 months before rates increase so we think we could see a correction near term. But volatility also suggests corrections. Do you see those as buying opportunities. Yeah, we would be excited about that because if you look at how we think the fed will raise rates we think theyll do it at a measured place and we still have low oil prices and strong jobs numbers that should help support the economy. Lets talk about stocks you really like right now. One is a french hotel company. Yeah so we really like the Hotel Dynamics globally. They have a new ceo in place. His vision is to fix up the balance sheet. He bought 4 million options himself so he clearly sees a lot of value and so do we. One of the problems we heard from people that do business in france, had to deal with hotels over there talked about how you get yourself in a jam when you want to remodel these. Do you worry about structural issues . We see more his opportunity being in terms of how theyre changing their hotels and the leasing structures we think thats a big opportunity for them. What about monster beverage . We like monster beverage. Theyre taking a lot of share in the u. S. From larger megan drink companies and they have the auctionalty in europe and we think china is a huge opportunity for them and coke owns 16 of monster beverage with the option to take it up to 25 and that gives them a Great International footprint. Finally, barry plastics. Yeah we think they could hit their sweet spot this year. He make plastic cups and containers. Great Free Cash Flow story and the ability to pay down high cost debt and they have superior products on the market with hot and Cold Properties and the ability to add graphics to their cups. One stock is visa. Its in a much better position because of the costco deal that went down. How do you see all of this playing out for visa and American Express too . We like the opportunity for visa. Its an 80 billion transaction opportunity. That could add 1 to 2 to the Revenue Growth by 2017. When you see American Express walking away from a deal that was more material than they would let on to investors. It raises the question if the terms of the deal were too strict and too stringent. Can visa turn this into something . We think they can because the economics looked good for visa. The economics might not be as good for Something Like citi group participating in the deal. But we see it as a positive. What can they do differently . Well theyre getting their usual transaction fees they normally get on other deals so its a usual deal for visa. Thank you for coming in today. Thank you for having me. You can also go online to track sarahs picks as well as the other platinum Portfolio Managers picks in real time plus read their exclusive analysis. Coming up all aboard americas railroads are battling congestion. How were all being impacted by the good luck next. But first as we head to break heres a look back at this date in history and theres a very special one in 1998 that well talk about. Up im reworkin the menu. Mayo . Corn dogs . You are so outta here aah [ female announcer ] the complete balanced nutrition of greattasting ensure. 24 vitamins and Minerals Antioxidants and 9 grams of protein. [ bottle ] ensure®. Nutrition in charge™. 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. Americas railroads are battling unprecedented congestion. So much so theyre still struggling to overcome gridlock back to 2014 and morgan joins us now from bellevue ohio with more on how some companies are responding. You get all the lucky gigs. Its certainly never a dull day here at cnbc for me. Ill tell you that. This is the bellevue yard where 1800 train cars come through each day. Theyre filled with everything from coal to grain to corn syrup. Capacity is in the process of being doubled and its largely to help ease that congestion you just mentioned in other parts of the network. Particularly the choke point of chicago. Were seeing this dynamic across the entire freight Rail Industry right now. First we have volumes coming back to prerecession peak levels. Second whats moving on the rails is changing. More crude oil, more autos, less coal and third its remained unchanged at least until now. Were seeing investments being made across the entire 140,000 miles of freight rail track that is here in the u. S. And this year alone companies are forecast to spend a record 29 billion. Thats according to the association of american railroads. A lot of that is money going to more locomotives like this. More train cars. More track, Better Technology and also more space at terminals like bellevue but of course the question now guys is going to be the fact that as these projects and investments begin to come online will it be enough to ensure another solid year of sector growth with the declines weve seen many crude oil prices and the black log at the west coast ports which has already been weighing on volumes for this year. Back to you. Okay. Morgan. Is it outside cleveland . I dont know bellevue. This is one of the biggest train yards. Theyre in the process of doubling capacity. Its huge. Its tracks of railroads and cars coming in here and basically when you talk about train cars being sorted and put on to new trains before they go out to new destinations. Its cool. I think you can do that. I like that logo. Happy friday 13th. It is friday 13th. I know. We have wedding news now and then. The soaring cost. And joes own story on a special day for him. Should we tell everybody . Well tell everybody after the break. But first as we head to the break take a look at the s p 500 winners and losers. 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 . This is an interesting one and ill tell you why. My wonderful wife and i have been married for 17 years but its friday 13th today and we were married on friday 13th and it was a Lunar Eclipse and thats very rare. It was 1998 so its 17 years but its only happened one time since then and it was just this year or last year. And a Lunar Eclipse and it wont happen again like 100 years from now or something. Its very rare. A lot of weird Energy Associated with it. So she is kind of a wicken because she was born on october 31. Congratulations. Its nice and i want to wish penelope a happy birthday. He was looking for a picture. He pulled this out of his wallet this morning. Hes carried it in his wallet every day for 17 years. Incredibly romantic. Ill tell you another thing that tree is a sacred tree in cona. You were married in hawaii. Its owned by whom michael dell. And i think its great that he has the real picture. Its a little bit tattered. Its a romantic very beautiful notion. I dont have anything ive had in my wallet for 17 years. Its not digital. Its totally analog. I like that. Thats right. Youre going to talk about weddings are getting more expensive. This was not expensive except for the greens fee. Since that time weddings have gotten a lot more expensive. Theres a new survey out that says the average wedding cost was up 4. 5 to 31,213. That may sound like a lot but really the highest level that you hit is in manhattan. Guess how much it costs on average for a wedding in manhattan . Im going to go with 70,000. And this is just for the wedding. This is just the wedding. This is not a honeymoon or anything else associated with it. Im worried that im low. Am i low. No people dont have 70,000. 40,000. 76,000. Thats not who can get people dont get married then. I think the high end is what skews it. Very wealthy people have a lot to spend on this. 70 range. Its the high end that brings that number up. But the number for manhattan is down 10 . Its dropped as people have started looking for discounts. They have a friday wedding instead or sunday wedding instead and that number is actually down 10 . Wow. You can buy a house or you can get married. Right. Its fun and big. Too pricey. Yeah. Given all of this is actually about happiness, this is from our friends at the World Economic forum where we always go to the alps and davos everywhere. Happiest countries in the world to live in do you think that advanced developed countries youd be happier in the developed country or undeveloped country. I need to see. I go with counter. I need to see the methodology. What do you think the happiest country is according to this. I wont believe it. Mexico comes in at 79 of people in mexico say theyre happy they say between 7 in 10. Thats the only question . Venezuela comes in at 74 and u. S. At 65. Israel comes in at 75 . Places you do not want to live kenya, tanzania coming in in the teens. Kenya is only 14 . Theyre not happy campers. My stupid phrase. Happy campers. But theyre not as happy there. El salvador. 66 of people happy. Egypt, not so much. They have been through some very difficult times. But youd be surprised to see that many people particularly with what happens in iran and different places i would love to hear more about what they asked them but that also tells you something. We have things very good in this country and we should be happier than we are. But you dont know the methodology. Ive seen it where they adjust it great on the curve basically because this is a pretty great place here. One last piece because im going there later this month on vacation and they apparently rejected gdp as a metric and have a Gross National happiness. Where is that and why and how did you figure it out. Its on my wifes bucket list so were going. Give me a hint. Whats the attraction . Beaches. Trekking its supposed to be a very happy place. Meditation no beaches. No beaches. So its landlocked. Its supposed to be absolutely beautiful. Really . Ill take pictures. Is there a city . Theres a couple of different cities, yeah. A lot of old you fly into paro and what is paro for jeopardy you dont watch jeopardy. Trebec just resigned. Love him. 10 million a year. Millennials dont watch jeopardy. Who is alex trebec. 1 in 10 people a night do. Amazing. 10 Million Viewers a night and hes only getting a buck a viewer. He has a lot of viewers. Some of the categories are lame. Last were like 1930s. Theyre a stretch. I like more trivial pursuit questions. If youre smart enough you can figure it out. They love putting the categories together where they all hang together in a weird way. They have been doing it a long time. You dont remember art fleming . I watched at lunchtime in 5th grade. I dont know. Before my time. We do have some we have a jeopardy question of sorts. We need help from our viewers. We have questions for you because well be introducing a new segment called keep squawking. We want you to tweet the story youre buzzing about this morning s. There something that you read that you think our viewers need to hear. If you do we want to know about it and well tell everybody about it. So tweet us at squawk cnbc and use the keep squawking. Well read all of them and then share them. In the meantime when we come back well head to that break, we have breaking news russian central bank. The happiest place. Just really really happy. Theyre three sheets to the wind with vodka but theyre very happy. They might be more so this morning. Cutting key Interest Rate from 14 to 15 on effort to stimulate the economy over there. Were back in a moment. Women have been advised to lean in and be the boss in the work place. A new book combines these ideas and promises to show women and men how to legally control every aspect of their lives. Here is lisa green. Shes the author of on your case. A comprehensive and compassionate and slightly bossy legal guide for every stage of a womans life. She so bossy. Just a little bossy. Not nearly as bossy as you guys can be. Are you supposed to be bossy . Proactive. Im going to reach out to the people watching this that might be on their treadmills or drinking kale juice or hiring tutors for their kids. Youre missing an area. Its using the law. Not in the way people usually use lawyers, this is thinking of lawyers the opposite way, bringing them into your lives at certain stages of your lives to make life easier. Lets go through controversial stages. Prenump. Should you. Not everyone right. Only 3 of couples have them. You would never know that from the way we talk about them night and day. Is that number too high or too low . Probably okay. New couples starting out same levels of Family Income theyre going to build a life together. Probably fine without the lawyers. If youre remarrying and you have kids from your prior marriage eyeing that new spouse like you might be taking a piece of my pie. Good to get a prenup. Some people say they dont want to have the conversation because the conversation into itself then anticipated a problem is coming in the future. Queue the law firms were going to lawyer up our marriage but i would say thats like saying Health Insurance means youre going to get sick. Its Preventive Medicine and most couples cant bring themselves to have that financial conversation. This is a good way to sit down and talk. But you said the 3 number is right. You dont think it should be more. But were okay. Think about who the 3 are. If theyre the right 3 the people who are remarrying or people that come into a marriage with wildly Different Levels of Family Wealth you want to protect those family businesses. Thats when money starts to create problems because of situations like that. I think money is an tun and one of the things you can do with money is hire a lawyer that can calm things down ahead of time. Its just human nature for people entering relationships like marriages to be wary. But you say contractural relationships. If i said that to my wife she would get upset with me. But if you said to her lets just put these matters to rest and lay down guidelines its no different than the way people are behaving. Frankly how ironclad are they anyway . Most of the talks we hear about prenups are the people trying to break them up. Youre free to break them up. My book has stories of women asked on the eve of their weddings to sign a prenup. A court might turnover that kind of thing but mostly they can be pretty reliable when you go to court and try to uphold them. Im already married so what is a postnup. Good luck with that one. Sometimes in circumstances change. What kind of circumstances are we talking about . Good circumstances like you come into a great source of wealth. I made a lot of money and id like to figure out how to cut you out of it. I made a lot of money and i want to figure out how Going Forward if we break up as so many couple i see the skepticism and heres the problem. Im just wondering how you have the conversation. I get it. You have the conversation by saying its time for us to be grown up. Doesnt accelerate divorce. I dont think so. Whereon anyone with a prenup. Do you . Andrew does. But you have a bunch of rich friends. I can say who has a will who has a power of attorney who has a health care proxy. We have all of those things. I dont have all of those things. I dont have the power of attorney or health care representation. Basically in those situations what people are saying is nothing bad is ever going to happen to me. Are there prenups . And one of the great benefits of making same sex marriage legal is it affords them the legal rights married couples have. You were talking about the cost of weddings. Theyre happy occasions but with great happiness comes great responsibility. That sounds like spider man. What is a nonup. Its like a prenup for People Living together. The book on your case. Go get it. Dont do it andrew. Its too late. Its too late. Its not. He has a pilot on showtime. No no no. You have a lot of great youre going to make a lot of money. And a great marriage. And you are in a much better i saw the glint in your eye. No way. He is never ever ever. Coming up now i know i know. I know what im talking about. Its your anniversary today. I know what im talking about. Coming up, is now the time to take your money on a european vacation. Stock picks to take advantage of and what many are calling a continent on sell. Ill say so. But first as we head to break check out some of the most clicked stories on cnbc. Com. Before larry instantly transferred money from his bank of america savings account to his merrill edge retirement account. Before he opened his first hot chocolate stand calling winter an underserved season. And before he quit his friends leafraking business for not offering a 401k. Larry knew the importance of preparing for retirement. Thats why when the time came he counted on merrill edge to streamline his investing and help him plan for the road ahead. Thats the power of streamlined connections. Thats merrill edge and bank of america. 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. Friday night, buddy. You are gonna need a wingman. And with my cash back, you are money. Forget him. My Airline Miles will take your game worldwide. What im really looking for is i got two words for you rewards. Theres got to be better cards than this. [ male announcer ] theres a better way with creditcards. Com. Compare hundreds of cards from all the major banks to find the one thats right for you. Its simple. Search, compare, and apply at creditcards. Com. First rounds on me. Why do i take metamucil everyday . Because it helps me skip the bad stuff. Im good. Thats what i like to call, the meta effect. 4in1 multihealth metamucil is clinically proven to help you feel less hungry between meals. Experience the meta effect with our multihealth wellness line. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Welcome back, everybody. The europe stock 600 index is up 15 already this year. The bond buying Stimulus Program is just getting started. Many big investors and ceos say europe is bursting with buying opportunities. In fact, heres what utx Ceo Greg Hayes told us yesterday. You think about the euro coming down. I was telling folks yesterday, europes on sale today. Maybe theres an opportunity over there with the euro at 1. 06 where properties that may have seemed out of reach six months ago become manageable. Joining us now to dive deeper is Portfolio Manager with Franklin Templeton investments. Phillip, thanks for being here today. Thank you. You heard what greg hayes had to say. Is europe on sale today . I totally agree. The euro is down 25 since last summer. There are still attractive companies that are a quarter cheaper. Europe is not like the u. S. In terms of m a. The uk is very much like the u. S. But if you look at europe, hostile deals are not that successful usually. There are a lot of barriers. What some are like family controlled. Or i can think of a number of companies that are considered national champion. Which are out of bounds. Theres no doubt that it is still growing a wave of acquisitions by u. S. Corporation of european assets. We just mentioned that the euro stock 600 index is already up 15 this year. So how much is the word already out . And are these things still undervalued . My thought is theres too much too soon. You know, stock market in two months of that magnitude hasnt happened since 1991 in europe. So we are in a bit of a you know, everybodys trying to catch up. Significant underweighting by International Investors in europe. So, yes, were due for a post in shortterm. But i stl think the upside. It seems there are two different stories. One is companies that are on sale. A multinational Company Wants to make a purchase. Then for an average investor who just wants exposure would you give them caution or say get in now because the ecb is starting quantitative easing and we know what happens. Timing the market is a futile exercise. If you have a horizon expressed in years rather than months now is just as good a time. Even 15 up. My advice would be wait. The last time you were with us, you said you think greece is a pain in the neck. Did i say that . Had. Yeah. Have a they become a bigger pain . They are playing a very seedy game. The latest news was that the greek ambassador to berlin put in a formal complaint that german finance minister didnt talk nice to his greece counterpart when he was visiting. Thats childish. I still think the risk of greece leaving the euro puts at 25 . Its small but its real. And they are a bunch of amateurs in essence. And the negotiating skills are not exactly up to scratch. If they do leave the euro does it hurt greece more than it hurts the rest it would be a catastrophe for greece. It wouldnt be smooth sailing for europe. Obviously then people would focus on who is next because this would be the first time a country would be leaving the euro. So then people would say is it portugal, is it spain . We want to thank you for coming in. Always good talking to you. Thank you. Still to come this morning, weve got bill ackman. Hes going to join us to talk about the manipulation of herbalive stock. Squawk box returns in just a moment. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Zbrnchs details on the probe into the herbalife situation. Another leg down for oil. Citigroup calling for a sharp drop in crude in the coming months. Whats getting consumers to loosen their pursestrings . Cosmetics, apparently. The second hour of squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin along with joe kernen and becky quick this morning. Look at equity futures at this hour as we see how thungs are setting themselves up. Dow jones looking higher about 6 points. S p up 6 points as well. And the nasdaq up about 3 points. The ruble cutting the Interest Rate to 15 . This in an effort to stimulate the economy over there. Among our other top stories this hour the United Steel Workers Union reaching a tentative deal. Also ibm is considering adopting the Technology Behind bitcoin for a new feeless payment system. Thats according to reuters. Ibm would use a digital ledger of transactions to allow people to transfer cash or make payments instantly without a bank or party involved. And major world powers have begun talks about lifting sanctions on iran if a nuclear deal is completed. Negotiations are iran are expected to resume next week. Senate Foreign Relations chairman bob corker is going to be joining us. Thats coming up at 8 15 a. M. Eastern time. The federal prosecutors and the fbi are probing herbalife stock. This coming from the wall street journal, a couple of other reports. But unclear whether this is new, in fact. I did speak to bill ackman last night on his way back to new york. We will have him on the show in just a little bit. He said in part i am puzzled by the story. We have not heard from the fbi or department of justice. If they have any questions for me, im happy to answer them. I stand by every statement ive made about herbalife. The company has never identified anything weve said that is false. Kate kelly is also here this morning. She joins us with more on this story. Thanks. The investigation by federal prosecutors as you mentioned is not actually new. The Financial Times first reported it on april 11th of 2014 giving herb alive shares a 14 drubbing. Herb a herbalife has continued that. Including the s. E. C. But more importantly the federal trade commission. This along with the core business due of late especially to currency falls and also slowdowns in some of those countries like venezuela all has pushed it down about 30 in the last year or so benefitting ackmans position. Last night it was ackmans turn to feel some of the regulatory pressure. Word that the feds may be progressing with a case for market manipulation in its shorting of herbalife. And the notion that theyre interviewing associates of his to get more information about that and they sort of pivoted to focus on him. Rose herbalife shares about 12 . So, you know its been an up and down period for the stock as you all know. The question here is is there really a shift in focus . Or is this is case where you have investigators looking at all aspects which i understand they are . And im told its actually hasty to say that ackman is now the focal target of this. My sources say the same thing. That this is part of an overall investigation by all sorts of agencies into whether herbalife unto itself is in a scheme. Also looking at the different trades and things around that on bill ackmans side. Herbalife has been saying this for a long time. They were making the argument he was manipulating the argument even before he made his presentation two or three years ago. Sure. I remember they counterpunched about a month later with his investor day in new york. I interviewed their ceo Michael Johnson. You can understand why theyre trying to fire back. Ak ackman has engaged in a Grassroots Campaign to get local and regional politicians interested in this issue. Especially the question of whether or not he not he herbalife allegedly preys on the vulnerable in society. So you can kind of see where the frustration comes. And there are those who have been trying to peddle part of these stories to the media. And so its unclear whether the investigation as you say whether its pivoted or not and whether this has just been stirred up. Thats right. I wouldnt be surprised if regulators and investigators are a little bit frustrated as well. There have been a lot of accusations thrown in. For instance, think of herbalife and the Insider Trading cases. There was a low level employee who tipped a you have a roommate to ackmans position. And the s. E. C. Actually tried to bring charges but the two guys left the country so they couldnt pursue them. In another case, george soros was long the stock and somebody accused ackman of Insider Trading by telling investors they had a big position. That fell through too. Tough cases to prove. And kind of a side light to whats really going on here which is questions about the Business Model and its legitimacy. Thank you for this. Stay where you are. We should also tell you we will get bill ackmans take personally on this topic. He will join us at 8 00 a. M. Eastern time. But in the meantime joe, we have another guest. Yes, we do. More on the federal probe of what we were just talking about. Were joined by ron geffner. Former s. E. C. Attorney. Weve beat the heck out of this already. You want to add anything to it at this point . I think this case is going to go nowhere. Its the cost of doing business the s. E. C. And the fbi and the Attorneys Office really would be looking for two things. This would be open market manipulation if there were something. If we look back what does that mean in traditional manipulation, that would be reflective of it where theres a form of deceptive or fictitious trading. Thats not whats being looked at here. Its more theoretically short selling married with information that ackman put into the market place. And what has the right to disparage a Public Company . Is that because of the First Amendment or are there other laws . All host of reasons. But if its true you can say it its your belief. So what the government what if its not true and its your belief . Good point. Excellent question. Whats happening here is if im the government im looking to see if ackman or people working with ackman injected false information into the marketplace while i was engaged in short selling to manipulate the market. So what theyre going to look to see is whether there is a smoking gun that says lets put this out there and fundamentally they can prove theres no fundamental belief behind the research of the statements. Which i expect to be challenging to prove. And ive worked with clients who are active in the market in this regard where we spent days in offices looking through multiple emails from multiple parties trying to prove that there was some sort of failure of real belief. The other thing theyre going to look to is whether a group of people acted in concert. Not in concert because they have a belief its a good investment. But to drive down the price. One of the questions we had in the last hour is given that ackman is likely speaking to regulators and other government offices as part of his short campaign, and knows or at least has a better inclination than we might about where the government may stand or not and we dont know, can he continue to trade during that period . How does the government look at those . He can continue to trade. In my mind the risk isnt any higher. He had to know before he started this campaign this was going to be looked at. So its always going to attract attention. I guess what im saying is if i go into a meeting if im called and told id love for you to come in. At the end theyll say we continue to look at this. Then the next day you make a trade do you have Material Information because of what the ftc told you . You dont now were going into the Insider Trading theories. There it wouldnt be a breach of the duty owed to the issuer. I wouldnt see that as insider information. What about andrews collection of belief of something thats ultimately false . Theres no sense of belief and conviction. Weve seen him laugh and cry. He feels very strongly that herbalife is a pyramid scheme. I think his belief is very real. If his belief is real and his conviction is real this is as i said when he first started this is just the cost of him doing business, him having to deal with this and deflect it either publicly. And if regulators look at him, then wonderful. But in the same respect, if regulators are looking at him why are they not looking at people like icahn and those long the decision 1234 i liken it to like a traffic ticket. You see two cars in an accident. You cant just talk to one driver and inquire about how they got into an accident. Youre going to look to talk to both drivers and get the full side of the story. Right. Okay. Ron, thanks for coming in. And kate thank you. When we come back this morning, disney is on a roll and a bonus frozen short film might be as big as the action film cinderella is that opens today. We talk about the way disney is crushing it. And then a bold call on oil. Morris expecting a sharp fall in the cominge inging months. Also the squawk ceo call in session. The ceo of ulta will join us. Squawk box will be right back. Its a fact. Kind of like shopping hungry equals overshopping. At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. 12k3w4r6r789s for all the live action cinderella. We already have our tickets for 10 30 a. M. Its one of the ways disney is crushing it. Stocks up almost 300 since bob iger was named ceo. Julia boorstin has the top reasons for the search. The number one reason is the Winning Strategy of building or buying brands and exploiting them across disneys movie, tv Digital Properties and theme parks. Thats epitomized in the announcement about three new star wars films and a frozen sequel. Far more than just movies. Theyre available intellectual property. Iger has built big acquisitions. Included lucasfilm marvel and pixar. Another is adapting the content and creating products specifically for overseas markets such as india. Third, a focus on technology with everything from digital distribution. With 11 more marvel films in the next four years and two pixar films this year alone plus park expansions, it would be an interesting three years. Iger has extended his contract until 2018. Stick around. Were going to get more on igers decade at the helm plus whats next for disney. David bank is here. Whats in a post. Iger world . Are you convinced they have the bench that will keep doing is this all iger or are there names we dont know about . Well look. I think theres an incredibly deep bench at this company. I do think that the unfortunate part is that bob, you know was an architect of these strategies. The fantastic acquisitions this view towards embracing Technology Rather than being afraid of it. The bad news is eventually hes going to be gone like everybody. The good news is the way the table is set, it couldnt be set any better. So for whoever steps into that seat are you saying a ham sandwich could run the place after this . Most definitely not. But i do think i envy the person walking into the seat having the studio set the way it is having the parks set the way they are, having the franchise, having basically every key sports franchise locked up for espn for the next more than half decade. All these things are set so incredibly well. I think you start at a bigger advantage than bob had when he walked in. Julia, chime in on this too. It feels like they bought everything they could buy. What else is out there that youd want them to have . But they dont even need to buy anything else to tap into the power of the brands. He recently appointed chief operating officer creating a new position. Staggs is currently running the parks. And before that he was cfo. This is a guy who has a deep understanding of how every part of disney works. And is getting this sort of on the ground handson experience running the park which is a big part of disneys business. His role really highlights that. That would be a streamless transition. And asked the question about what they need to buy next they havent even started to tap into the value of the star wars franchise. Theres so much more to do with marvel as well. They dont need more acquisitions though certainly they could. We havent talked about the frozen sequel yet. Thats new news. This coming with cinderella or the second one . Theres a sequel coming. Theres a sequel coming. And a new star wars too. When they said theres a sequel to frozen coming its like youre kidding. Because money drives everything. Will it be as good as toy story 4. Is there something left in that story . We know andrews very excited for both. Yes. He cant wait. You know, my view when we talk to investors about this i think what is so remarkable about it is almost how unremarkable it all is. That frozen 2 is one of frozen 2 is like a billiondollar franchise and its one of like countless billiondollar franchises they have. Its almost becoming i remember talking to eisner years ago and he talked about how the princesses themselves were a 5 billion franchise and this is probably going back 15 years. But as a movie, forget the Global Consumer products franchise business. As a movie, this is you know if youre a studio and you have one of these a year youre killing it. Beyond that its amazing. If you take it into the parks. If you take it into the it absolutely is. What they have done over the past two or three years is incredible. They took a studio with a 10 operating margin. They doubled the margin to like a 20 margin. Which in the studio is crazy. You made it out like this is a no brainer of a company. Yeah. If there is a challenge the challenge is about everything were not talking about. Weve addressed the studio the parks. What happens to espn disintermediate world . The sling thing, whats it going to do . Had. Well theyre on sling. Thats the good news for them. I think the biggest challenge over time is that is the maintenance of that basic bundle on paid tv which is crucial to espn. I think it would be you know assuming that you can deliver that content year in and year out thats just head and shoulders but the one thing i keep hearing, everything were talking about, the sports franchises at espn and frozen and toy story, its all content. If you ever had a question as to whether content is really you havent said one thing about how its delivered or whether theyre getting into this. I just did. Well i mean, i heard sling. But how great is you would call the parks content. I would argue. I would argue that. I think what draws people to these parks versus other parks is the underlying intellectual property. Content. Its the brand. But you cant guarantee that continues. Thats the problem. You can have flops. You can have people that although universal is building significant content too. Harry potter and marvel and dr. Seuss. Squawk box. Youve had a fantastic ride no doubt. You cant guarantee its going to continue. But heres the thing. If as an investor if you look across the universe across the entire platform their visibility is no greater at any company than it is at disney. As much as you cant guarantee it, you can guarantee it more for disney than any other. You can guarantee it for sports, i think. Im looking at my im planning my day out even though its my anniversary like villanova. Julia . Go ahead. In terms of distribution there are always questions. On recent earnings calls and interviews with me on Cnbc Bob Iger has talked about how distribution is changing everything. They are seeing the rise of streaming like traditional tv ad sales. This is sort of the way of the world. But theyre taking advantage of that as well. Because theyve done things like buy the studios. Theyre really experimenting with and investigating new and different ways that younger audiences in particular consume content. A lot of that is about getting thins shorter over the internet rather than traditional tv. Even though theyre seeing those challenges, theyre trying to figure how to get ahead of them. I think ultimately when the paradigm shifts and the ultimate paradigm shift probably is a direct to Consumer Product for media, a bundled direct Consumer Product for media, no company is probably going to be stronger than disney. I think thats what the fox time warner attempted merger was all about. Was to try to create an asset, create as much content with as broad a portfolio as disney has. Fair enough. David, julia, thank you for joining us. You are welcome, andrew. I appreciate im thankful that you thanked us. Anyway what is next . A mad money caller surprises jim cramer. Whats that about . Plus whats up with Vladimir Putin . Why the kremlin is insisting that hes fine and theres nothing to see here. Reath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhh ahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim before i knew it. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] at mfs, we believe in the power of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. Do the math. Big number. Welcome back to squawk box. Speculation is swirling in russia about the state of president Vladimir Putins health. But his Spokesman Says that putin is in his words, really perfect. The russian president has fallen out of sight for a week since hosting the italian Prime Minister on march 5th. He postponed a trip to kazakhstan this week. Theres been speculation in Russian Media he could be seriously ill. Weve seen things about that in the past year or so. Weird you know nothing concrete, obviously. But a kremlin spokesman rejected that notion and said putin is keeping his usual busy schedule. All the pictures we see, too, he is a rather young guy. Yeah. He looks good. You know exercises with the martial arts. Likes riding horses shirtless. Yes he does. And fishing inging shirtless. Jim cramer celebrating ten years of mad money last night. He was surprised by a caller from california. Lets take a call. Go to tim in california. Tim . Hey, jim. Im calling from cupertino, california, to be exact. This is tim cook at apple. And i want to congratulate you on ten great years on mad money. Never one to miss an opportunity, he asked tim cook about the next frontier of tex technology. I know the car, the home do you think of them as connectivity . Do you realize these are the next frontiers or is there a frontier im missing . Im not thinking big enough . I think those are two big ones you talked about. I think health may be the biggest one of all. Because for years have depended on strictly somebody else to determine their health. And now these devices in essence empower people to manage and track their own health and fitness. And so i think that market is probably significantly underestimated. Tim cook also told cramer that he thinks about steve jobs every day and that jobs is still the core of apples corporate dna. Incredible interview. Coming un the slide in oil prices isnt over yet. Well be told why it may fall in the next coming months. Well look at equity futures at this hour. Green arrows across the board but only marginal. Were back in a moment. Financial noise financial noise financial noise welcome back to squawk box, everybody. Among the stocks on the move this morning, aeropostale. Also earnings at zoumiez after a high increase in shares. And El Pollo Loco getting a boost. A secret japanese robot maker giving in to demands from dan loebs third point. They will consider giving some of the growing cash reserves. This follows pressure from loeb. A lot of the people in the Japanese Press and elsewhere in new york saying this is a big move for japan because this is a company that never had an Investors Relations department. Were always here right . Yes. We are always here. Where else would we be . Crude Oil Prices Sliding after a large supply increase in a key u. S. Storage hub. Analysts starting to wonder if the u. S. Has room to store all of the oil. Down 52 over the last year. Are we now headed further into bear territory. With us ed morris. You know in the past we have made the comments that on the way down no one was bearish. Now were here and its getting more crowded in that camp. How does that happen . Well you see prices keep sliding. And you look forward and refinery runs arent coming back. U. S. Inventories havent been growing since the beginning of the year. At record levels. You will kind of worry about tank tops. And if it does reach, how far is it going to go. If we try to be futurist what will occur more quickly . The adoption of a single car family of every family in china . Will that come more quickly than higher cafe standards and a move to electric cars and new technology in finding more . Which goes faster . I think the bet is when chinese demand has been really slowing down dramatically yeah gasoline demand is up, but diesel demand just came to a grinding halt about four years ago. And actually it looks down versus where it was even a year ago. Its a structural change in the economy. Another bet that falls by the wayside. They mostly do over time. Its still staggering, isnt it . And i think we stayed at a hundred long enough that people thought that was the days were gone. Actually if you look since the beginning of the century, oil was above 100 kind of flat it was the most stability nonvolatile period we had since 2000. But it obviously when i first started in the Business People told me when gold was at 800 gold will never go below that. Then we spent years at 200. We always seem to think we reach a new level of things and were not there. Do you know what the inherent value of a barrel or oil is . How much does it cost to produce it. Should we use that . We should use it on the way down. You need to figure out what the price is. Although its cheaper as we get better at doing it. Canadian oil is still 45. Whats the cheapest to get it at . In the middle east, maybe 5. And whats the most expense i have . Canadian at 45. Shale crude is less costly to find and develop. This is like a 40 oil. Where are the peak oil people now . Are they hiding . Some have left the earth, i know. Well unfortunately matt simmons, yeah. But its amazing. I mean it just its human nature, i guess. The idea that the resource is there. So people keep lumping onto that. On the other hand theres a lot of materials. You say five bucks in the middle east. I thought maybe it was 20 or something. So if the saudis really say forget it. We want to try and break the American Oil Companies or the american oil wells and drilling they can do it. Five bucks. I mean i know they have promises to their people. But is there a point where they have to let up or can they just hold this out forever . They have somewhere between 700 and 900 billion depending what theyre looking at in ready cash. It depends how much theyre willing to run that down. Maybe they can do it for two years. But its a gamble. When youre thinking about this do you have a something you focus on more. Is it supply or demand that you try to because its hard to thats what makes it hard to decide on the price. Id like to settle on the price of production. Because demand is going to fluctuate. I would think it would keep getting higher. You said thats not necessarily true. Demand is growing but its growing at a much lower rate. Is there any way it stops growing . No. Alternatives . Electric cars . Coal demand keeps growing. So as long as the growth in supply outstrips the growth in demand. Yeah, you can even with coal and oil you can point to a potential day when youd reach a ceiling. I think that day comes closer. Do you think five years from now were back above a hundred . Look low prices bring a bunch of unintended consequences. Who knows how much Oil Venezuela and nigeria will be producingeing next year. Was it manipulated by the cartel for a long time sfp. It wasnt. The stunning number is the amount of oil and disruption. Thats why i mentioned venezuela. Since 2010 u. S. Production is up a staggering 80 . Fastest Production Growth in any producing country. Disrupted supply is up by 3 Million Barrels by a day. Total disrupted supply started when the libyan disruption started at a half Million Barrels a day. If you include that normal disruption, 3. 7 Million Barrels a day of supply was missing. It took a half decade for u. S. And canadian production to outstrip the supplies. I could remember some of our leaders i wont mention names but they were talking about whether to expand offshore drilling or open anwar or Something Like that the mantra was really we cant do anything here. We ask add incrementally to our oil spot but we cant really change the game domestically here. So we need to develop other sources. That was not true. That was absolutely false. Actually its amazingly not true. If you look at pennsylvania which ten years ago produced no gas, if pennsylvania were a country, it would be the Third Largest gasproducing country in the world next to the United States and russia. So the growth in gas has been dramatic. We look at rig rates every friday when the data comes out. Usually on monday investors go into the market and buy crude because thing the rig count is going to slow down production. On the natural gas side rig count down 80 . Production up 40 . That should have given us and we did talk about it a few times there. How can natural gas be down but oil still over a hundred. Theres something screwy here. And the other thing we said was at a hundred thered be a lot of global events that should have caused consternation about supply. Nothing could keep it. It was so top heavy. Its where is it going . Wheres the lowest weal see . Well i think if you have to shut down production it could go to 30 or below. It wont stay there long. It would stop between 20 and 30 . I think so yeah. Thats the cost of producing shale why . Because it takes longer to get that stuff back up and running again . No. The production comes roaring back. Thats not the issue. The issue we have a flooding market. The government doesnt allow exports. And there are a lot of importers that want to shove oil into the u. S. Theres not a balancing mechanice inging mechanism at work. Well we have enough refineries here to meet demand more or less. Our refining system i thought the situation is we didnt have enough refiners who could do this type of crude oil which is why we continue to import the wti. Thats exactly right. Meanwhile the u. S. Is the largest exporter of petroleum in the world. Can you sell that minivan we the big windmill that you bought on the back . That you made up and tease me about constantly. But what if the sun goes behind the clouds . Then we sit on the freeway. You just sit there. The solar powered airplane scares me. I think id take the car before an airplane. Supposed to be a nice day. I think were landing before sunset. One person does point out the social cost of saudi adding 15 bucks. Its 5 to produce but theyve got 70 unemployment theyve got to buy these people off, dont they . Theyve got to do something. Theyve got to overspending on infrastructure projects. Okay. Thank you, ed. Good to be with you always. Thank you. When we come back this morning, ulta salon is a giant in the cosmetics and beauty industry. The stock up sharply. Well talk about all these things with the ceo mary dillon who joins us next. I bring the gift of the name your price tool to help you find a price that fits your budget. Uhoh. The name youol. Shes not be trusted. Kill her. Flo it will save you money the name your price tool isnt witchcraft and i didnt turn your daughter into a rooster. She just looks like that. Burn the witch the name your price tool a dangerously progressive idea. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com welcome back, everybody. Ulta beauty out with Fourth Quarter results beaten on top and bottom lines. Also guiding up to the next quarter and the stock spiking after the Company Reported all of this news. Joining us right now is mary dillon. She is the ceo of ulta salons. Thank you for being here today. Absolutely. Thank you for having me. This caught people by surprise. They knew they were going well but not quite this well. Whats happening that is giving you an edge up . Well you know what . We think that weve got a great recipe here for women who want to discover the fun of beauty. Ulta was started 25 years ago and right now i think were only just getting started. So if you come into an ulta store, youll have an experience that is a playground of possibilities and our guests are really responding to that. Its not just makeup. Its more beyond that things like Hair Products what else . Yes. Im glad you know that. We have color cosmetics, fragrance, hair care nail skin care. Also there are services in every ulta. We have an expert hair salon in every store. We also have Skin Services and a brow bar. So you can come into ulta have all of your beauty needs met all in one place. Specifically said women and i havent heard one thing that wouldnt apply to andrew and me that youve talked about. Skin makeup hair coloring. All of it. Nails. Everything that you said and yet you specifically i dont want to get sensitive about this. You guys are 1 percenters in this sense. Can we even show up there . I mean id look to personally escort you to the store. Now you say that. Earlier you said women specifically. Well women are our primary shopper, but we have plenty of men who shop and use our salon, our Skin Services, our brow services. We have products for men as well. So you are very with m. I mean andrew seriously. I dont know. You take pride in those things. I like them. Like groucho. Any ulta you walk into our associates i believe are the very best and they love what they do. Theyd love to help you. Mary, i know one of the things ulta has, theyve been outside in the parking lot of a mall or some place else. Is that part of why youre getting traffic . Weve heard mall traffic traffic in the malls has been down. That hasnt impacted you guys. What else is it . Yeah. I really believe thats part of the genius of our model that weve always been in places that we call power centers, lifestyle centers. Just as you said theyre very convenient to drive up and park and shop as a destination. Thats proven to be successful for us. In fact were opening up a hundred new Stores Every Year for the next five years. We had Terry Lundgren of macys recently. They purchased blue mercury. They were paying about 210 million million. Your market cap is probably beyond 10 billion. We are talking a different size and structure. But the reason he was so interested in but interested in blue mercury is he wanted to bring those brands into his stores. I just wonder if youve heard from any other major retailers, anybody who might be interested in an acquisition even though your market cap is well beyond. You know what . Really, im not focused on that. I think weve got a great growth plan we just communicated for a really strong fiveyear plan. It will go well beyond that obviously. As you mentioned, we think the way for us to win is to continue to do what we do best. Were on this quest to bring the fun of beauty to our guests. Thats really working for us. Should also mention we carry brands all across the spectrum from different price points brands that our guests are very familiar with already to things that are exclusive to us things you might find in a Department Store fop things that are just from ulta. So she can find all of her needs at ulta. And therell continue to be competition. But we believe kind of playing our offense is the best way to go. All right. Mary, thank you for joining us today. We appreciate your time. Thank you. She did include us finally. She was nice. She just didnt didnt realize what a big makeup shopper you were. Yeah. Didnt realize that it you know, were not really metrosexuals, but we could certainly benefit from im not. We need the makeup. You kind of are a metrosexual is little bit . Im okay with whatever you want to call me. Hes stylish. I am not. You like to shop dont you . Not really. Coming up we asked you to tweet us stories you want to hear more about. And as part of our new segment keep squawking. Up next the headlines youre buzzing about including a volcano. And later bob corker warning the president that cutting out of the deal would be an affront to the american people. His words. Stick around. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance, and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long you have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Does a freshly printed presentation fill you with optimism . Then you might be gearcentric. Get a 15 gift card when you buy 75 in hp ink. Office depot officemax. Gear up for great. [male announcer] if youve served in the military, certain habits may be hard to shake. For reintegration and adjustment issues big, small and everything in between, visit easter seals dixon center. Org. Jo nes. Zero, three, two, six. Here to make a deposit. [bell chime] ting welcome back to squawk. Were introducing a segment were calling keep squawking. Weve been reading your tweets all morning. Many of you sharing stories youre buzzing about and urged us to buzz about as well. John harris urging us to check out pictures of the newly formed volcanic island. Could become a tourist attraction . Look at these images right now. The island started forming only in january after a volcano began erupting there. You know what i like about this . They talk about how real estate is so valuable because they aint making any more. Guess what they are. I would like to be fully confident its formed. And then also you know a lot of islands start like this and they end up lush. How long would it take before wed actually put in a bid to buy the island . You dont want to own that island. But itd be cool to go speaking of hawaii. Kona. You can do to where the beaches are totally black. And on golf courses sometimes you can hit your ball into it and you cant use it anymore. Can we land our plane there . Thats really the that or the chopper. These are the issues that i think about. How do you get there on a boat . I think its telling you think about issues like that. And you said our plane. Our plane. You know the squawk plane. Lets also tell you tweeter christine wants us to talk taxes this morning. Your big due date is coming up, right . Its like my birthday. I know. Article titled Small Business donors scramble to prepare for new tax reform. This has to do with obamacare. Employers with 50 or more workers must file new forms on what employers are being charged for for their employersponsored health plans. It doesnt happen yet, but people are in a rush to figure it out. The thing thats confusing is it requires you cant just tell them the price tag. It requires them to where you have to calculate the lowest cost plan for each worker on a month by month basis. You cant just say this is the price. And you have to have 50 employees or more . I think so. That still seems i would want that higher. Were going to be talking about this law for a long long time. Whats the other i saw the other day the percentage of the signups that are subsidized. Did you see the number . 87 or something. And, you know theyre very selfcongratulatory weve got all these people signing up. Basically youre subsidizing, i mean, of course. I would figure everybody would be signed up by now. What did jeb bush call it the other day . A monstrosity of a law. This is not finished. Were going to be talking about this in 2016 well see how things play up. But i dont know. Will we call it obamacare after hes president . Yeah, we still will. Who was it that wrote the editorial today that i thought was interesting about oh our friend lahnee chen had about 50 separate plans to cover insurance for the uninsured in each state. That was his idea in there. Anyway, youre reading all these . Ive got one more for you. Entertainment buzz going on. Actor will ferrell bolstering his stat sheet yesterday. The actor played for ten different baseball teams and covered every position on the field in Major League Spring training baseball games. Ferrell did the stunt to raise money for cancer survivors to go to college and as part of an hbo special that will air later this year. Apparently he had a helicopter to go place to place. He probably put on all the equipment as a catcher. Catcher would be that would be one of the ones that would be a little bit dicey. You know, outfield you mess up or the hot corner third base would be a little bit scary. Are you kidding . Any position would be scary. Catcher theyre fouling balls into you and youve got to put all the equipment on and get down on your haunches. Its very and the guys going from place to place. I think they could hit my fastball. I just have an idea. And i dont have a curve. They couldnt hit mine because i couldnt get it to the plate. So good luck with that. Thats our keep squawking segment for today. Day one. Coming up when we return, bill ackman. Were going to have him live at the top of the hour. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. 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. Hey mom, you want to live by the lake, right . Yeah. Theres here. Did you just share a listing with me . Look at this one. Its got a great view of the lake. Its really nice mom. Your dad wouldve loved this place. Youre not just looking for a house. Youre looking for a place for your life to happen. Zillow was herbalife stock manipulate snd the fbi probing folks close to activist bill ackman for any potential wrong doing. The man himself, bill ackman speaking out first on cnbc about the investigation. And is a deal with iran paving a path for Nuclear Weapons . Senate Foreign Relations chair bob corker will join us with a warning for the president. Dont sidestep congress. Plus the all new ford f150 officially goes into production today. Fords president to the meshes joins us to talk about what investors can expect as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, everybody. This is cnbc first in business worldwide. Im becky quick along with joe kernen and Andrew Ross Sorkin. We are less than 90 minutes away from the opening bell on wall street. Weve been watching the futures and they are under pressure even as the market picked up ground yesterday. This has been a lot of back and forth through the last week. All the way to last friday when markets really started focusing on the better news and raising the question whether that would mean the fed would raise rates earlier rather than later. This morning the dow futures are down about 54 points. S p futures off by 4. 5. Also the nasdaq down by 6. The european markets under pressure as well. Looks like the cac, the ftse the dax down. And greece the athex composite there down by 1. 2 . We do have a few stocks to watch as we always do in every trading session. The buckle earned 1. 25 a share in the Fourth Quarter. One cent above expectations. Revenue also beat the street. And ann inc. Earned a penny a share. The retailer also says the profit came despite a significant negative impact from that west coast labor dispute. And our top story today, andrew has. Okay. Federal prosecutors and the fbi reportedly probing potential manipulation of herbalife stock. Theyre said to have interviewed people hired by bill ackman. The wall street journal reporting that the feds want to know some people hired by ackman made false statements about herbalifes Business Model in order to encourage investigations into the company and thereby lower its stock price. We brought you some of his comments from last night. But now were going to hear from the man himself. Standing by is our resident ackman watcher. Scott watchpner joins us with bill ackman on the phone. Thank you. Thank you for joining us. Sure. What is your understanding . Basically what i read in the newspaper. Some agents have contacted and interviewed we hired a firm called Global Strategy Group. They in turn hire subcontractors throughout the country and they say cysted us with Government Relations and lobbying. And behalf of our firmly held view that herbalife is a and some of their i think a handful of their workers have been interview bid the fbi. This has been going on since the summer of 2015 at least, its said. Youre telling me you know nothing at all of this investigation. You learned it from reading the newspaper . No, no. I was aware that members of global trat ji group had received subpoenas from the department of justice and had given interviews. But i dont know more than what i read in the paper is what i mean to say. You have not been contacted or interviewed by investigators, is that correct . Certainly not by the fbi or doj. We have very i would say proactively and offensively been to see the s. E. C. And the doj to make our case about herbalife. But i havent gotten any subpoenas asking me to testify about market manipulation or anything else thats concerning our conduct with respect to herbalife. Youve spent tens of millions of dollars on this. Whats the number at this point . Its something less than 50 million and the vast jart of that is actually legal fees. And second investigative costs. Using hidden cameras, recording devices. You know weve had investigators go into nutrition clubs, you know go to herbalife distribution centers. And weve spent a fair amount of money doing that. We spent a fairly small amount of money out of the total package on advocacy. But its something weve done and something we believe in. Last night herbalife said in a following statement. For more than two years bill ackman has spent more than 75 million fabricated an attack on herbalife all to enrich himself. We are confident in our Business Model. Are you worried, bill that at some point this does lead back to you . That this investigation criminally does lead back to you . Absolutely not. And heres why. You know market manipulation if you go to the s. E. C. Website i think is probably the best place to go is someone who intentionally releases false and misleading statements for the purpose of artificially moving a stock price. Right . What have we done in herbalife. Weve done 18 months of work. We hired a company to assist us on our Due Diligence in e the company. We have very carefully formed views. We released those views initially on december 20th in a 300page presentation. A threehour web cast. Its recorded. I encourage you to watch it if you havent seen it. We notifyied the s. E. C. About a week before the presentation that we were going to make the presentation. Weve been in to see the government. Weve walked them through, you know, many times elements of our concerns about the company. You know, this is not you know herbalifes recent release, they say weve fabricated information about the company. Weve done nothing. Its not actually to enrich myself because ive committed to give away 100 of profits. Its a criminal enterprise. It preys on principally undocumented latino people in the United States and poor people around the world. This is a conscious strategy the most Senior Management of the company. Im shouting it from the rooftops you have shouted it from the rooftops and herbalife has gone on another rooftop and certainly shouted back at you. Can you say with absolute certainty you admitted that Pershing Square has hired companies whether consultants or whatever to investigate herbalife to lobby regulators on your behalf. Can you say with absolute certainty that anybody that pershing has paid directly or indirectly has never made a false or misleading statement about herbalife . How can i possibly say that . We hired Global Strategy Group to help many politicians get elected including the people in office in the Attorney Generals Office and around the country. Its a reputable firm. Is it possible one of them made a false statement . Its certainly possible. But i dont know how that first of all, we dont need to make false statements about herbalife. My statements couldnt be more clear. I said its a pyramid scheme. Thats a violation of the law. Theyre intentionally deceiving people promising its a wonderful Business Opportunity and think they take their money. And the money gets transferred to a handful of people at the top of the mir mid. These are true statements. I stand behind them. We have evidence to support them. Someone made a false statement, i dont know what could be more critical of a company than what ive said. We havent encouraged anyone to make false statements and we dont need them to. The facts speak for themselves. Its one thing whether ultimately this investigation is up to you at pershing but what about your reputation . What about the damage that could potentially be done that may have already been done, frankly, to your own reputation . The reason why ive gone on first of all, people are guilty of crimes dont go on Network Television the morning after a story appears in the wall street journal saying that, you know people weve hired are under investigation. People who believe in what they have to say, who care about their reputation go on Network Television and are prepared to tell the world exactly what answer any question you have. You can ask me anything you want. You know, this is weve done an enormous amount of research on the company. We stand behind the work. By the way, herbalife has yet to dispute anything weve reported other than saying we said false or misleading or fabricated things. I encourage them to go through point by point any of our presentations and point our errors in our presentation. Ill also point out to you let me make one other point. Michael johnson as ceo of this company has disappeared over this last two years. He perjured himself on cnbc. He had a totally false statement. After he made that statement, Michael Johnsons lawyers said he shouldnt go on tv anymore. The first part of the Conference Calls are recorded. Johnson reads a script. Then he says nothing for the rest of the call. If Michael Johnson thinks im saying false statements about herbalife, ask him to come on cnbc and answer questions. He wont do it. Hes disappeared for the last two years. Im going on bloomberg at 10 00 and ive offered fox the opportunity to ask me questions. Well, we appreciate the fact you came on squawk box first. Let me ask you about another item in the news before we go. That is valeant. You have a new 5 reported position in valeant. Valeant had a deal for salix. Endo pharmaceuticals comes in with a higher bid. Does valeant raise its offer for salix . I think what happens here is unfortunately the event is going to lose a lot of money. Stocks trading north of 187 a share. I know mike pearson well. Hes the most disciplined buyer of companies. Hes not going to overpay for sali salix. You have a deal that can close april 1st for 158 a share. And then you have endo excuse me, who is part of the process. If you read the Details Behind the transaction, endo was a bidder. Did Due Diligence on salix. You can read it in the materials. The board chose a valeant bid over an endo bid. The reason they did is for good reason. This is a company thats in enormous distress. Theyve got 400 odd million in cash. Theyve got 330 million of debt in may. Theyve got an upcoming regulatory approval. The revenues have gone from 500 million in q3. The Senior Executives have been fired or resigned for, you know stuffing the channel. Theres an interim ceo and cfo. And there are four directors overseeing this company. If i were on the board of this company and in order for them to take the endo transaction, they have to walk away from an allcash deal, you know, that can close on april 1st. The endo transaction, even though theyve done Due Diligence, its subject to further Due Diligence. Its a 75 Stock Transaction so that if shareholders this is not an acquisition of salix. Its a merger where the salix shareholders will own 40 of endo. Endo will be a highly levered company. We think over six times leverage for a business that does not have the quality and durability of products and cash flows that valeant does. Let me finish because i think its important and i want to protect my friends who might be thinking about buying salix stock at this price. My point here is that deal also requires shareholder approval from salix and endo. And also you cant enter into a deal like that unless you do a detailed Due Diligence on endo. Youre not going to rely on an investment banker to do detailed investment. The problem is there is no management. So i think the markets gotten all excited about this alternative transaction and driven the stock up to 170 a share. But, you know the other issue is that you cant even hedge lets assume a deal could happen which will take probably six months, five months Something Like that if they rush to set up something now. Theyd be forced to walk away from valeant. Theres an approval coming up in may which may go against the company. Lets assume everything went right and the transaction closes. Then they end up owning you know stock entirely held by arbs. Theyre going to own 40 of the company. And you cant hedge it because you have to short twothirds of the outstanding parts of endo just to lock in your profit. Just the demand for shorting the supply of shares from shorting will meaningfully reduce. I dont view it as a credible bid. As a result i dont think valeant has to pay, frankly, more. Now, all that being said you know, if i were the company, i would use this offer from endo and go to mike and say, look mike. Can i get you to pay a little bit more and get this done . Mike will make his own decision. He keeps his own counsel. This is probably the most shopped company in the last 12 months if you look at the book. And valeant was the only allcash transaction that could close with certainty. And in a situation like this directors are focused on downside protection, not squeezing the incremental dollar. If you think valeant is getting it on the cheap, buy valeant stock. There you go. Thanks for joining us this morning. Appreciate it very much. Okay. Have a good day. All right. Bill ackman. Andrew . Bill, are you still with us for just one sec . Yes. I want to follow up one question to clarify one thing on herbalife for one moment which is this. What is your policy at pershing around trading in herbalife both the head of presentations or after presentations that you make publicly either on tv or elsewhere and particularly the meetings you or your contractors have with the government . Because i think that goes to the heart of the question that was raised in these stories this morning. I mean first of all, our position in herbalife, we havent traded around the position. Weve basically held a large short position in the company that we started in december of 2012. And weve held it up through the stock price rise. We changed the form of the position in the end of the Fourth Quarter of 2014 early part of the First Quarter because we were getting squeezed by mr. Icahn and others. So we covered a bunch of the short as ive said publicly. And we bought relatively long dated puts. Whap weve done since then is rolled those puts and kept on the same side investment. Were not trying to make money on herbalife stock. We have a firmly held view and of course any one at the government is welcome to look at how weve traded this. The government fortunately or unfortunately does not tell us what theyre going to do with respect to herbalife. We have made multiple presentations to the s. E. C. We have sent them documents on probably a weekly basis. Weve made presentations to other regulators including the doj. Including attorneys general around the country. You know we dont disclose. The government says to us we dont want to disclose anything we discuss at the meetings and anything the government might say. And you have not traded in and around those meetings either up or down . Thats correct. And then one final question. Is there a policy for the contractors that work for you that relate to their trading in herbalife or other companies related to this . I dont know the answer to that. I would be very surprised if our consultants, you know, Government Relations consultants are trading around herbalife stock. But you never know. We dont as far as i know have any policy with respect to that. I assume youd have to ask them. Thank you very clarifying that. Scott, thank you for coming on this morning. Bill, thank you for coming on this morning. Great conversation. We appreciate it very much. Any time. Were going to switch gears here. Its just days ahead of the next round of Nuclear Talks with iran. Senator bob corker is chairman of the senate Foreign Relations committee sent a letter to president obama saying any way to bypass congress and go straight to the council to implement would be a direct affront to the american people. Senator bob corker is chairman of the Foreign Relations committee and he joins us right now. The confusion i have here senator, is that the administration am i correct that really without exception have all said that we wouldnt try to do this without congressional approval. So why do they seem so surprised, you know, when you try to actually take that step. And what does congressional approval mean . A vote or they assume youre all nodding or something . I think when john kerry said past muster we understood that meant vote. There are u. N. Security Council Sanctions against iran. There are executive sanctions that the white house has put in place. Were not trying to deal with those. On the other hand there are the congressionally mandated sanctions that most people believe is what brought iran to the table. So we passed those in congress. We passed a series of those. What the administration is hoping to do is suspend those beyond the time that president obamas in office. And what were saying is no. Before you can start unraveling things that congress put in place, youve got to come to us for a vote. And this is something that is bipartisan. We have a number of democratic sponsors. And its really fascinating to watch this administration be so desired to make a deal with iran they dont even want to come to congress to show us what the deal is to give us the annex. They just want it appears they want to go straight to the u. N. Security council and try to bind congress by going that route. Obviously we think thats inappropriate. Weve been more than a full partner on this. I mean were the ones who really caused iran to get to the negotiating table. We just want to make sure we have the ability to review this make sure its going to stand the test of time. Make sure its not going to create proliferation in the arabian peninsula. But now were having to force it by trying to have a vote ourselves to keep them from doing this prior to getting into the final deal. Im reading it. So this is a direct quote that secretary kerry said any deal with iran would have to pass muster with congress. I dont understand. Well what does that what does that mean other than did he misspeak . Or is that what he said before he didnt say it . How do you read that . I think theyve been trying to move away from the position of coming to congress in any way. Theyre trying to frame this obviously so its not a treaty. And i understand theres a basis for that argument. But the fact is theyre trying to move away from this. I think theyre afraid to come to congress to have to explain what theyre doing. We know that for some time the u. S. Position has been moving towards the iranian position and not vice versa. Weve all been very concerned about it. Especially now, joe. The length of time of this agreement appears to be something in the rank. We began with 20 plus a 10year expansion. Again, this is all about our national security, stability in the region and ensuring that iran doesnt become a part of the Rural Community and have 130 billion that is now trapped in other countries available to export terrorism, more terrorism to syria, to yemen and other places. So again, biggest geopolitical event during the times were here. We want to make sure Congress Plays its appropriate role. Is it really unprecedented, senator . I mean i see to some extent that a president needs to be able with his cabinet to negotiate Foreign Policy decisions. Especially when hes got some of our allies involved in the negotiations as well. Is this really unprecedented . The action that was taken by the senate with the original letter and now your letter . Yeah. So again, i think you have to realize that certainly if we were only talking about u. N. Security Council Sanctions, then obviously the white house would have the ability to deal with this as they saw fit. If it was only executive sanctions that they had put in place unilaterally through the executive branch certainly. This case is very unique. Because again, its congress. If you remember the white house was kicking and screaming about the fact that congress was mandating these sanctions. Now everyone understands were the ones that brought them to the table. And all were saying is mr. President , please dont take actions that do away with the congressionally mandated actions without coming and getting our approval. Again, this has bipartisan support. Moving in a positive direction. Chuck schumers on this. Obviously the Ranking Member bob menendez. So this is not a partisan approach. This is Just Congress saying mr. President , if you want something that is going to stand the test of time thats going to go beyond your administration, that another president doesnt immediately undo, come to congress let us approve this. Senator, weve got to go. But before we go i just now even that irans Supreme Leader is unhappy with that letter he actually called the letter a sign of the decay of political ethics in the american system. Yeah. This creates some strain. The democrats and the Supreme Leader are both very upset about the letter. Which makes for some strange bedfellows. Id be uncomfortable. I dont know. But really a decline in ethics. Another example of the decline in ethics over here in america. Senator, weve got to run. Thank you. We appreciate it. A lot more squawk box to come including fords president of the americas on the new f150. Squawk box will be right back. Moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The s60 sedan. From volvo. This month, get these exceptional offers on a new volvo. Visit your volvo showroom for details. E financial noise financial noise financial noise financial noise [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Barbara just bought a bike. She wrote a tweet about it. You cant learn much from that. But take data from millions of tweets combine that with your companys supply chain and sales data. Apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. Because barbara and the world just told you how to build a better bike. Theres a new way to work and its made with ibm. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call td ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need td ameritrade. You got this. Were just a few seconds away from february data. Lets get over to Rick Santelli who is standing by at the chicago board of trade. Close enough for government work. February ppi coming out momentarily. Were expecting it up. 3 . But thats not what we have. We have down. 5 . Now lets get to some more reality here. You take out food and energy guess what. Synonymous. Youre still down. This new trade number they have final year over year all these numbers are much much cooler than many anticipated. So were going to continue to monitor. Yields arent really moving all that much. Were right around 2. 09. There are many that think deflation, inflation, disinflation are driving forces for treasuries. I think investors see through that to some extent at this point as they watch some of these prices drop. In the loop of negative rates. But many the end we had big reaction yesterday on retail sales which gives me hope the markets are still handicapping the american. The economy. They closed at the highest yield last week. So it has been a down week. But boy, oh boy were consolidating a lot. Yesterdays big run to the upside didnt really have a huge effect on treasuries. We still have more data to go. Everybody continues to watch the euro. The euro after a bounce yesterday is only down a bit at this point. Back to you. Real quickly, yesterday the futures market and then the stock markets took off because it was this weak data that suggested the fed wouldnt raise rates as quickly. Do you think were back in the environment where bad news is good news . Thats an easy answer to say yes to. But before i came in and saw where the equity markets were i had someone call and say the euro is having a bounce. If you dont believe it look at a onemonth overlay on any equity market. Very high correlation over the last month or so. All right, rick. Thank you. Well see you again soon. Steve leisman is here along with john riding. And this is a surprising number. Its a very surprising number. As i look down the list of the details of the report its negative, negative, negative. Food down 1. 6 . Exfood and energy down 0. 1 . Consumption goods down 0. 4 . Im looking for a positive here of finished goods. I look up the chain, different stages of processed goods. It suggests theres disinflation well it suggests disinflation at the wholesale level in the pipeline. And that can be good for earnings because your input costs go down. If your consumers stay about the same, its competitive. Why isnt it deflation . Huh . Why isnt it deflation . Theres a difference between disinflation and deflation. I know there is. This is at the wholesale level. Youre not saying disinflation. Youre saying deflation at the ppi level. Right now our core consumer inflation level is still positive positive. Right. The overall process that i think is going on in this economy is disinflation. I dont think were into a deflationary right. Theres Nothing Better than john what explains this . This is not just lower fuel costs. I think that economists struggle with this number since they changed. It used to be clear what a wholesale price was. Now it includes services and since it includes Services People have a harder time its the majority of the economy at this point. It is but whats a wholesale hair cut . I mean you know its a very very more difficult concept to get your arms around. Cpi is going to be different next week. Were paying higher prices than in january. Cpi is probably going to be up. 3 . No getting around it. For the u. S. Consumer its not a deflationary environment apart from lower oil prices. I dont see anyone complaining other than the oil producers. But how does the fed put this all into their mix in terms of determining whether or not to go ahead and raise rates in june and september, wherever that might happen . Well the economy by the feds own metrics is close to full employment. And so theyre going to start setting policy more by the way they would have set policy in the past. Fully allowing for the fact that inflation is low. And thats not a zero rate. And so theres been a change in peoples thinking. Saying if were not the inflation target we still justify the rates. And thats not how anything that weve learned about in central banking over the last 40 or 50 years tells us. But were going the other way. Thats the problem. This number this morning, what we know is going to be the impact of the dollar on u. S. Inflation. Jpmorgan the other day lowered its outlook for the core by 0. 4 which means were going to be in the low ones moving further away from the march target. How does the fed process that . How does the fed also process the fact that there is a High Percentage of jobs not being filled since 2001. And the Unemployment Rate is down at 5. 5 . They have to balance no wage inflation. They will be. You promise . Yes. The economys Getting Better and the Unemployment Rate is down. This is temporary. This is good. Enjoy it. Its not going to last forever. The musics playing. Tomorrow 9 26 a. M. In 54 seconds. 3141592654. That is the pi moment. You heard these guys talking about how many they knew. This was a total nerdoff this morning. Steve, john, guys thank you. Well done. When we come back this morning, a second factory coming online for ford to build the f150 trucks. Plus jim cramer gets a mad money surprise. Well ask him about that and ask market moves. Stick around. Squawk box will be right back. At mfs, we believe in the power of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. Today marks the official start of production for fords all new 2015 f150 at its Kansas City Assembly plant. Joining the dearborn plant in building the fseries truck. Joining us now from the new ford plant in kansas city is joe hen hendricks hendricks. Hes the president of ford Motor Company. Good morning to you. Good morning. Joe, this seems very important to get this plant online. Im reading right here this morning an article that says the 2015 ford f150 is selling so well that the Motor Company isnt able to adequately meet the demand right now which is having a negative impact on truck sales because perspective buyers are having to wait for their ideal trucks to arrive. Now you have this thing online. How quickly are those perspective buyers going to be able to drive away in one of these things . Well, youre right. Weve been focused on delivering retail customers so Building Models for dealerships because were turning trucks on an average of 18 days on the lots right now with this new f150. Well start with fleet deliveries in the second quarter. But so far demand has been great and we cant be more excited. Is it true youre struggling with the demand issue though . Well our fseries sales so far this year are up a little bit, but theres more demand for f150 especially at the fleet level. Once we get the plant up and running well be able to support that in the second quarter. The other thing i was noticing and i dont know how youre thinking about this. This new f150 is said to retain its value much better than the previous models in part because of the issues related to oil and gas and the improvements there in terms of efficiency. How much did that go into it and weighing against using aluminum for the body which apparently was the other the flip side which people always sometimes worry about when it comes to resale. Yeah. Alg came out with their projected residual values for our truck. It was in the high 50s which is significantly better than chevy and ram. This attributes itself to more value to our customer. When they own our truck over three years, lets say. And a lot of that came from the fuel economy savings. Coming from the lightweighting of the truck by using aluminum. All are being felt by the customer and eventually in the value of that truck over time. What are you seeing broadly given the price of oil these days, what its doing to car sales across the board at your company . Were seeing Strong Demand for suvs. Thats been happening over a long time before oil prices dropped. And the car business is feeling a bit of that pressure as people look to buy more suvs and trucks. So well watch that very carefully. Overall its good for the industry. Its a good time to buy a vehicle. Consumers are buying vehicles in good quantity. Joe, when you make your longterm plans in terms of new vehicles, where youre going to focus, et cetera and you look at whats happened to oil, has it changes anything about your plans over the next five years . It really hasnt. One, we expect as others do that oil will continue to rise in price over time. Also we have fuel economy mandates to make. And not just requirements to make in this country but around the world. Were going to keep investing in that technology or new technologies like electric vehicles and otherwise because we need to for the future to deliver the fuel economy savings. Fair enough. Joe, congratulations on the new plant and we thank you for joining us this morning. Thank you. So tomorrow big day, big pi day. But the big day coming up that im looking forward to my birthday in 2018. Because . January 6th 2018. 1. 618 is fi. Fi is used in many more things than pi. Art, design beauty financial markets. The golden ratio. Phi. 1. 618. And its on my birthday. If im there hopefully. How many years is that . Oh please. Thats only three years away. Knock on wood. Coming up a big meeting on heart health this weekend that could have implications for Companies Making new cholesterol drugs. Meg tirrell will join us with a look at the stocks to watch. Squawk box will be right back. Woman its been a journey to get where i am. And i didnt get here alone. There were people who listened along the way. People who gave me options. Kept me on track. And through it all my retirement never got left behind. So today, im prepared for anything we may want tomorrow to be. Every someday needs a plan. Lets talk about your old 401 k today. The annual American College of cardiology meeting kicks off saturday in san diego. Meg tirrell has a preview of what to watch. Meg, what should we expect . We talked a lot on this show about the new cholesterol drugs. Weve had the regeneron ceo on. Theres going to be some data there. This is a big war among cholesterol drugs. And farther behind pfizer. We should see some data in the late breakers. Those are the most important data highlighted at the meeting on the amgen drug and some of the cardiovascular outcomes being seen by lowering the ldl, bad cholesterol, with those inhibitors. Those are expected to be approved potentially later this year. As we get more of these to see how they work and not just that they do lower cholesterol, but what outcomes that has in terms of heart attacks and other things associated with high clost cholesterol. That will be a big one to watch. The other that could move stocks monday is a Swiss Company working in hypertension. This is actually kind of a rare disorder affecting the arteries between the heart and the lungs. They get narrowed. Theyre working on a drug that could compete with one from united therapeutics. We already saw some data on this drug. Phase three in june of last year which drove the stock way up. But were going to get more granularity on that data. That could have implications as well. A big war set up there as well. Are you going to san diego . I wish i was going to san diego. I am not. I was in florida last week. Watching from afar keeping track of everything coming out. Exactly. And amgen is going to have an investor call about this race so a lot of people will be tuned into that too. We look forward to hearing more from you next week. Thank you. Jim cramer gets a bit of a surprise on mad money last night. Well show you after the break and ask jim about it. Check out the futures at this hour. Down about 56 points so far today after a nice rebound yesterday. Well see what the likelihood is of extending those gains or those losses throughout the session. Fridays are ugly, but well see. 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 . [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Lets tick a call go to tim in california. Tim . Caller im calling from cupertino, california to be exact. This is tim cook at apple and i between congratulate you on ten great years of mad money. Wow jim cramer last night. That surprise callin apples chief, tim cook, calling in to mad money he had this to say about the stock price and mad moneys anniversary. For people that have owned the stock for ten years or so our stock price ten years ago was less than 6 on a split adjusted basis. You can bet those people are extremely happy right now. So jim, was that the Biggest Surprise youve ever gotten on one of these callins before . Regina executive producer Fabulous Team leader just hid this from me from the moment that she had nailed it. Ive got told you, i was totally shocked. She told me to take a phone call, ive got the live audience. Phone call phone call phone call. It was tim from california tim. And it just blew me away. Wow. It pleablew me away too. Just watching that. Its been ten years congratulations. You remember me the old days before kudlow and cramer. A wild ride. Amazing to watch. What are you watching today . What do you think, by the way of herbalife and ackman . I think that he was one thing thats clear, great interview, was that if you havent been contacted by the fbi, that means someone leaked something that is a real slag. I was listening to bill and i said to myself you know what . This is a very unfair thing. It would be one thing if he or someone directly in his office were contacted but if not, its just its a real slur thats not right. I have been on the other side with ackman, ive been proackman but this is wrong. Hes point blank tell you hes not been contacted and thats. You cant come on tv hes right, you cant say you havent been contacted. So i thought it was that storys not a good story. Jim, ill say, watching the markets get flipflopped by the data out euro oil, Uncertain Times people about vmbeen coming to you for ten years what do you tell them. I notice japan is up 15 unbelievable high for japan, which means japans coming back. I think europes coming back. Iokay. Im watching petrobras, its got the most debt and i dont know they can pay it. Very big mutual funds own a lot of petrobras debt and have not said were hurting. Thats where have you to worry no ones looking at. Thank you for the word of warning. See you if a few minutes. Congratulations. Will ferrell taking the field for a good cause. Plus, watch list for the trade dig ing day ahead. Squawk box returns in a moment. 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. Well, sir. After some serious consideration id like to put in my 15year notice. Youre quitting . Technically retiring, sir. With a little help from my state farm agent i plan to retire in 15 years. Wow youre totally blindsiding me here. Whos gonna manage your accounts . This is a devastating blow i was not prepared for. Well, im gonna finish packing my things. 15 years will really sneak up on you. Jennifer with do your exit interview and adam made you a cake. Red velvet. Oh, thank you. I made this. Take charge of your retirement. Talk to a state farm agent today. At mfs, we believe in the power of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. Actor will ferrell making his rounds through the cactus league, not only making stuff but playing in five games for ten Teams Holding spring training if arizona all for charity. Ferrell and hbo put on a special funny or die raising money to fight cancer and played all nine positions, apparently. Unbelievable. A helicopter going from game to game. He played some baseball. Well take a quick look at the squawk watch list. Heres whats going on 10 00 eastern time march data on Consumer Sentiment, the expectation index will remain flat at 95. 37 shares of herbalife going to be worth watching today. Prosecutors reportedly interviewed folks tied to Pershing Squares and bill ackman and herbalife stock. Bill ackman joining us at the top of the hour on squawk box. Let me be very clear, herbalife is a pyramid scheme preys on principally undocumented latino people in the United States and poor people around the world, this is a conscious strategy the most Senior Management of the company. Im shouting it from the rooftops. We invited herbalife to come on and respond to ackmans comments, they declined our interview request. Ford hosting its annual Ford University Conference Call at 1 00 p. M. Today. Executives updating investors on topics of interest at the company. Lots to chew on. Americans for ford. Americans for ford. I am not going to talk about anniversaries. 17 years youve been maried. Its friday 13th, we were married on friday 13th. Im not doing it every year. When we get to 20. Romantic stuff, ill take it back. Tomorrow is pie day, and then the next day ides of march, scotty my sons birthday normally id wear that tie, but its too thick. Hes going to be a teenager. 13. Wear it monday. Tomorrow at 9 26 a. M. 3. 1415926 and 54 seconds when pie really nails it. Wow. Tweet out at that moment. I may tweet out. Ill get up and see if i feel differently right at that moment if i feel circular or something. Everybody, have a wonderful weekend. Join us on monday. Right now its time for squawk on the street. Happy friday 13th. Welcome to squawk on the street. Im Carl Quintanilla with Jim Cramer David Faber at the new york stock exchange. The seesaw action continues, premarkets lower after yesterdays rebound. Russias turn to cut rates again. Oil down a full 8 since monday as its lost all of the gains from late january and february. The tenyear sitting around 2. 10 another weak macro number wholesale prices. Another swing in the market the surprise deflationary print on ppi, weighing on the markets