Transcripts For CNBC Squawk Box 20150320

All of this remember 32 Million People are in the path of a late season snowstorm today. The line of heaviest snow stretches from West Virginia up through new york. Some areas are looking for as much as a half a foot of snow. Oh good. We keep thinking were done with it but one more time. Hopefully this will actually be the last snowstorm. Spring is here eventually. It will be snowing at 6 45. Some of the heavier snow is coming. Oh, good. One more thing to look forward to. We have schools here dismissing earlier. Some of them at 12 30. Thank you for that too. As the for the markets this morning, take a look you saw what happened, down by triple digits for the dow yesterday. This morning were seeing a nice rebound with the dow futures you about 89 points and the nasdaq up by 17. 5. A Solar Eclipse is different than a lieuunar ellipse. Yeah. But they both involve the moon. Yes, because the Solar Eclipse is the moon block out. The earth is never blocking or is the earth in the path of the. The earth is in the path of the earth is in the path for the solar. I thought it was for the lunar. For both. For the lunar. We shouldnt be talking about this. Sorry to raise these issues on air like this but among the other top stories were focussing on this morning, earnings central, well be looking for Quarterly Results. We get a couple before the bell and then in europe leaders are meeting with greeces Prime Minister in brussels today. Greece is committed to drafting a reform plan soon and in Corporate News this morning, the wall street journal reporting the key Staff Members were actually in favor of suing google for violating antitrust rules before the agency settled its investigation back in 2013. The newspaper citing confidential fts reports which argued that google took information from rival websites to improve its own earth results. There you have it. Theyre still debating the lunar eclipse. The earth moves in the shadow and blocks the sun from the moon. But to have a Solar Eclipse it would have to be the moon. Yes. One is the moon in the middle. One is the earth in the middle. What was that story about. I have no idea. Google. Why were we still on the moon. I raised another important issue before this. I shouldnt have done that. Tell me again. The ftc i read it but are you disappointed . You love google. Im not disappointed. I do love google. You want all the tech companies, you want the ftc to investigate all of them. I dont believe that google is a monopoly however i was surprised that they found that google was actually scraping up sites to improve their own results because google suggested that people scrape their sites. So verizon and comcast are monopolies and the airlines are monopolies and the Drug Companies are but google is not . Seriously. In a different way. You have to sort these things out my friend. You really do. Ill tell you why i dont think i want to know. Because you in your garage could start google tomorrow. A google version tomorrow. Because google took it from yahoo i didnt think anybody could beat yahoo increasingly its a higher barrier now that they own youtube. So google is not a monopoly. So youre on google side. Im on googles side. Big business. Im on the side of big business this morning. Big pc business. Did you think it was right to go after microsoft . No i was always arguing against that. I thought in the world of technology it made no sense. Youre more of an eu monopoly guy. Everything over there is. But you see howell things work over there in terms of business. So well. We should tell you about good news from amazon this morning, getting approval to test drone delivery outdoors. Theyll allow test flight to over private rural land in Washington State but there are restrictions. For example amazon must keep flights below 400 feet and make sure that the drone stays in sight. That becomes the problem. Staying in sight part if youre trying to create a delivery company. I never understood. There were threats that came from amazon. If you dont let us do it here well go somewhere else and test it to which i said okay. Go ahead. Why would we be concerned about losing out the testing here. I dont get it. A number of stocks on the move this morning, dow component nike. Yeah, do you remember . The dow component. Yeah i remember. You forgot . Yeah he did. Earnings beating the street. United health care too. This is when you keep changing it its hard for is it not it does get trickier. At least honeywell is still in. At t. Aig. At least we can always count on them being in there. Selling more high margin shoes and apparel but it warns the stronger dollar will take a toll on its current quarter. And shares of Mattress Firm getting a boost. The companys earnings and revenue topping estimates. Mattress firm. But get it . Firm mattress . Oh. A warning from a. K. Steel. They see a larger forecast. Rival steel company. Also warned in recent days. And new data on biogens alzheimers drug this morning, the experimental drug exceeding expectations. Reductions in levels of plaques in the brain that is associated with the disease but still unclear whether its a cause or a result but a significant song in this case of cognitive decline which would indicate its related. Bank of new york melon agreeing to pay 714 million to settle cases. They overcharged for currency services. The bank was accused of telling clients it would provide the best possible execution for transaction but give them prices at the worst rates while attaining better spot prices for itself. And shamu has a new boss. Seaworld naming a new ceo. He served as chief executive of the Worlds Largest theme park operator. It has been struggling due to weak earnings and bad press. That company long earned by black stone or they had a major stake for a long time. And godaddy is going public. It expects the offering between 17 and 19 a share. That would value the company at up to 2. 9 billion. Lets get a check on the broader markets. The futures are indicating a stronger open. Up to close to 90 points for the dow future. You can see in france the cac looks like it is up slightly by. 1 . The dax up by. 5 and ftse is flat and greece up by 10 this morning. Take a look at what happened overnight, youll see the nikkei in japan up by. 4 . Shanghai composite up by 1 . Take a look at oil prices which confounded many people this week and many weeks leading up to this week down 40 cents. 43. 66. In the bond market the ten year note is yielding under 2 . 1. 967 and taking a look at currencies, everything we have been talking about the last couple of days layed out in the front page of the wall street journal today. The euro is slightly higher against the dollar. Dollar is up against the yen at 12112. Finally gold prices look like they are up just slightly. 1,170. A currency call from Goldman Sachs today in a note this morning, its worth mentioning, says that the green back is set to extend its rally against emerging market currencies. The firm suggests a dovish fed will only provide near term resbit but among the things it sees pressuring currencies current akoubt imbalances commodity price weakness and low inflation. Joining us now is the executive chairman of the emerging markets group. He directs the Research Team which is based in 18 global emerging market offices and good morning. Its great to see you mark. As it always is. In the last month or so what has occurred to you that made you use things in a different light. Anything . Two main factors. One is the price of oil and the other is the decline of the currencies in most of the emerging market which is in many cases is continuing. So its really changed the environment dramatically. Do you see anything in either market that would be negative and more systemic than we think. If we can handle both of those in terms of the bullish se scenario. I would say now the russian market is a big question mark because if the europeans and americans continue the sanctions then the ruble will probably continue to get weak or maybe weaker than where it is now. I would say thats the really big question mark. Brazil is another question because brazil is an exporter and the exported company should do very well. Thats the case where the weak currency is helping them but only in deep trouble Lower Oil Prices not good on that side. So its a very very mixed picture. Were going to be talking quite a bit about the ukraine today not the ukraine anymore. It is ukraine. But i mean russia at this point, if the worst Case Scenario were to play out in russia would that be enough to cause ripple effects all the way over here in the United States or mostly just in that region . Well definitely. It will probably get worse before it gets better. Theres no stopping russia from moving further than where they are now and if that happens we may see more sanctions coming particularly from the u. S. Not necessarily from europe but from the u. S. And then of course you have these Baltic States that are very worried about what could happen and their stance would become more aggressive i would say. Obviously the worry is some of the former soviet union satellites. In poland there was a big piece last week that people in owepoland are nervous. Do you expect more aggressive activity like that from putin . I think, yes, i think they will want to move further to consolidate what they have and maybe cutoff a few extra pieces unless theres some good reason for them not to do so. Thats not happening yet. So i would say yeah it could get worse and of course all of these countries are worried. Not only because of the gas supply but they had fairly good trade with russia and now that will be gone. The good side of this picture of course is the fact that the euro is getting weaker. So theyll be able to ship some of their export in trade to other parts of the world. I mean here im in hong kong and theres people lined up buying luxury goods because prices have fallen because of the weak euro. So you have these dynamics that work which could help. As far as the United States go youre a Global Investor and you invest in the United States does the strong dollar attract foreign capital to u. S. Assets or does it hurt corporate profits to the extent that it becomes a negative . It attracts foreign capital into the u. S. Particularly when in some of these Companies Like brazil the political or Economic Situation is uncertain or deteriorating so you have people lined up in miami to buy apartments and that sort of thing. For the american companies, the large multinationals again its a very mixed picture because many of them are exporting. Many of them are manufacturing overseas. So when they remit the currency back to the us. Theyre loseing. So you have to look at each individual situation. Up to now the strong dollar has been positive. If it gets stronger anymore you may see negative consequences because the u. S. Will become uncompetitive. Particularly against the euro. Last question weve had people that fed watcher or central bank watchers pointing out that central bankers around the world have all been in sync and one of the things that has been the result or a move up in a lot of asset prices that you know central bankers can make things look better but not necessarily actually fundamentally any better. Do you think that thats the case or are all the Central Bank Action has made up for some of the demand that was lacking globally. Will it come home to roost or was it necessary and a positive . First of all, i think theyre out of sync with the u. S. Now. Theyre looking to tighten where as japan, europe and other countries around the world are feeding the market and putting more money into the market and loose bing. Loosening. I would say thats a big issue with the Global Economy but in the case of europe and japan, so far this talk of loosening, europeans are talking about it and lets see how much they act on it has been good. Its helping the exports and if you go to japan as i was last week people are coming in from all over the world to shop. Things are very kpaep incheap in japan. Thank you. Delay wasnt bad. Not bad at all. We do have our news maker of the morning. Ukraines finance minister. Shell be joining us on set after this. But first heres a look back at this date in history. Financial noise financial noise financial noise financial noise now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back. A global news maker joining us on set this morning. Ukraines finance minister joining us with our chief international correspondent. Thank you. She has the uncomfortable task of rebuilding the countrys economy from scratch as it seeks monetary support from the international community. Americanborn to immigrant parents, the finance minister of ukraine joins us on set. Good to have you here. Thank you very much. Youre here to meet with creditors. Youre going to need a restructuring and to meet with the white house. How did your meetings in washington go. The reports are you were looking for money . Is that true . And how did that go . First and foremost i came to say thank you for its participation and leadership in the g7. For helping us to get this package together. It wouldnt have been partisan without the administration and bipartisan support we have in congress. That said i did say i think this package is sufficient to stabilize but it wont be enough in the end for us to continue growing, to rebuild and renew the economy. Its a 17 billion package from the imf correct. Yes. How did it go with creditors who as part of that package the imf said you have to tell creditors they have to save you 15 billion over the next several years. How are they taking it. We have just begun the creditor discussions. Were talking to each other, listening to each other. I think that most of our creditors understand this type of deal is the only thing that will bring us back to some form of debt sustain bltability. One of those creditors is russia. You owe them 3 billion. They are equal to all of the other creditors. Are they going to participate . We asked all our creditors to participate and were going to do this on a basis of good faith. Transparency. Equity. We invited everyone to come to the table and talk to us. All of our sovereign including russian holders. Can you actually buyout just the russians and get them off of your back . Its hard to imagine youre going to have any successful negotiations with a country that has tanks on your border. Right now thats not an opportunity as we have. Given our low level of reserves. We were just a month ago at about 5 or 6 weeks critical imports. We doubled our rules to a little over 10 murder in the Second Degree but paying out right now is something were not having that discussion. Were having a discussion on debt restructuring and meeting the imf targets as they have been written. Are there any back channel discussions with russia . Not on our behalf. Are they trying to talk to you privately . Theyre not trying to talk to me no. In theory they shouldnt. Its u. K. Law bond. Theyre supposed to be equal with every other international creditor. They chose that. Right and frankly im not sure who the actually holder of the bond is at this point. We asked everybody to come forward. Were saying please come forward. The way the bonds are tradeable they can change every day and every minute. No one has come forward. Not officially. You can provide insight as to helping us as werners here western westerners understand whats happening there. We were talking about putin and whether theres intentions into the baltic state and even beyond that. You said it appears he might and he piers to be moving forward right now which is hard for us to even imagine that people would go into just encroach on a sovereign country. We thought that was in the past. I cant speak for them but what i can tell you is Russian Troops with Russian Support invaded crimea. They illegally annexed crimea and then they invaded Eastern Ukraine. So approximate principles of territorial integrity and sovereignty, the budapest memorandum which provided us guarantees, all of these principles have been broken. Its a fact over the past year. You have begged this administration for some help too in terms of arms and its bipartisan. Its on both sides of the aisle. You have republicans and democrats saying why isnt this happening. The president has still not made a decision on this. Someone asked has the state department recommended specifically to send lethal weapons to the ukraine and the administration wouldnt answer but still no decision to do that and i know the president poroshenko is almost begging for this, right . The will to fight is there. They just dont have the equipment. Whats the problem . Were not begging but we feel very strongly. Asking strongly. I feel very strongly. Why arent you getting a yes from president obama because european allies are telling him to hold off right. Theres a keen desire and i would agree with the desire to Stay Together and to stay united between the European Union and the United States. It would behoove no one to divide the Transatlantic Partnership so having a united front on sanctions, maintaining sanctions, decreasing them is very important but the ukrainian people have shown number one through free and Fair Elections over and over most recently president ial and parliamentary they have given their lives and sacrificed everything over and over for the principles of democracy, sovereignty and all theyre asking for is the worlds support. The world goes into many many situations where the people dont show themselves ready and willing to accept these principles and the ukrainian people have shown it for years now and for the past year in a very costly way. 6,000 deaths. 15,000 wounded. 1. 1 million internally displaced people. This is a serious humanitarian crisis. A war in the 21st century in the middle of europe. Were afraid to anything that has the appearance of expanding a conflict were afraid to be involved in. Under this administration. Under this administration no matter how righteous it seems to be. We care more about whether you talked about the mortalities. What about the Economic Impact which has been horrendous on ukraine as well which is exactly what youre meant to deal with. Well we come through this losing some 20 of our economy. The industrial east part of the country thats been occupied by the russian sponsored terrorists and troops has been an important part of our industrial production. Industrial production was down some 12 last year. This is something that costs us in terms of human lives. It costs us in terms of the finances and the economy. In terms of crisis within the country. The ukrainian economy, ironically i interviewed russians senior russians who say, ukrainians are so corrupt and i thought it was really rich to hear that coming from a russian senior Government Official when we make that accusation of russia all the time but ukraine has a terrible reputation when it comes to corruption, economically speaking. Is that Getting Better . What can you do about it . It is definitely Getting Better and about a year ago when the regime ended with the former president fleaing the country that one of the basic memories that every average citizen has is the corruption of that regime. Theres an enormous amount of leadership on my government to stop this corruption an were doing it in several different ways. One way is policy changes. Its the carrot approach. Things that change the way we do business Going Forward. Cleaning them up and making them transparent. Picking the leadership of these companies in a way thats transparent and reflects good governance. Theres always intermediaries between our state gas and oil company and russia or today the european reverse flow gas that were purchasing. We have no more intermediaries. No one is in between. They were skimming in other words in between. Of course. Theres none of that anymore. On the stick side theres more enforcement. So you see more and more enforcement. More and more people being arrested. Changes in the way these are being done. We had a law on banking and lending. We had banks fail because they have through fraud and mismanagement and through criminal activity caused these banks to fail and they ought to be held to account. How difficult kultd is it to fight that war at home on corruption while youre facing people abroad or is it easier . To some extent its easier because theres an entirely the ukrainian nation has never been this united in its desire to seek a european future. One based on transparency on these kinds of values so theres no room for half measures anymore. I said recently you cant half reform anymore. You cant be half pregnant with reform. This is something that we all have an absolute time sensitivity that we need to clean this up as soon as possible. Our International Partners want it. Speaking of half pregnant now that you brought it up what does ukrainian intelligence know about the health or the whereabouts of vladimir putin. I cant answer that. Youll have to ask the intelligence. Are you privy to the info. Not at this time. When there was no sightings of him for what was it a week and a half or whatever it was, did you get any intel behiennd the scenes. I dont know. You dont know. Ive been here. Do you have a secret telephone that you talk to people back no. I dont know. All of our phones are being listened to by all sides at all times. Do you have a bat phone. I do not. How does an american become a ukrainian finance minister . Ive lived 23 years and ive always been ukrainian and now im a ukrainian citizen and my 23 years in ukraine have been trying to develop this opportunity and potential and make it real and after the revolution and watching so many people sacrifice themselves and volunteer to go to protect Eastern Ukraine to protect our sovereignty when the president and the Prime Minister asked me to serve i felt that if there was something i could do at this very critical time i should do it. I had a very responsibility. Were your parents surprised . They moved here from ukraine. My dad passed and my mom comes and visits me often. They know that i committed my life to trying to change ukraine and trying to help ukraine but it was certainly a shock in reality. Great having you on. Thank you for coming. Thank you. This is fascinating. When we come back were going to try to keep it as fascinating but it may be hard. Coming up, headlines this morning, why income inequality will end in revolution taxes or a war. But first as we head to a break a look at yesterdays s p 500 winners and losers. Were back in a moment. [ 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. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Welcome back. Were in the chairs looking at stories grabbing our attention this morning. One was this Paul Tudor Jones one. He worries that income inequality ends up in some form of civil unrest or war or he says must have higher taxes but its an issue he worries about tremendously and theres probably even a self selffulfilling prophesy. No but this is an issue, the flip side of the issue that you would worry for selfinterest. But the details in there number one, he said i mean obviously no one wants a war or civil unrest but also higher taxes he said none of those three are on my bucket list for positive things to happen and number two he tried to be an advocate for capitalism. But in recent years the shorttermism and quarterly reach for numbers to increase Profit Margins and he is sort of asking for so one of these nebulis corporate, do things because youre nice. So his credit. He is robin hood. All the donations that go to robin hood go actually straight to the schools and everything else. Whenever he gives a speech he gets very emotional. His viewpoint also was that if 10 of americans own the assets and the assets go up. A lot of this i blame on the fed. The owners of the assets are the ones that are but id like to get the 90 that dont own assets to participate. We have to get them assets somehow. And i dont think hes advocating these type solutions. See his bucket list is higher. I think he offered a solution. I dont know five years from now as we get a better economy and 3 plus growth i think it helps a lot. That was the entire point. He constantly defended the idea of inflating the assets because you cant help everybody out. If the economy starts going and that was hi point all along. This is how you lift everybody. But the problem is that youre going to increase i was saying this to you before during the commercial break, maybe im wrong on this but the gap issue shouldnt be the issue unto itself. Its about how do you raise the bottom and create the mobility but the gap becomes a problem if you get the civil unrest and people become so furious. And he was talking just u. S. Too because as we know its worse other places. All right, watching anybody that picks brackets or watches. You lost already. You are humbled. You are absolutely humbled. Whats your record . My first three games i lost by a point and i had iowa state going all the way to the final four. So after the first four games. But i only lost one more. So i was 124. Thats good. 124 is not good. Any idiot can get 10 right. Right here. I was wrong on iowa. I was wrong on baylor. They are one point losses. How many did i get right . 12. I did . Heres what i have been waiting to tell you. I promised you yesterday i would fill out the brackets. She put it under another name. I had a breakfast so i didnt get back to the office until a quarter of 11 00. It was 11 57. I thought the deadline was noon which i think it was. I had no time so i clicked the button that said pick all the top seeds because i also figured, look i had to get it in but i figured this would be the perfect test because you poured your heart and soul in. She did it like a monkey. I am the monkey this time around. My three ohio teams brings a tear to my eye. Xavier was awesome and ohio state and cincinnati both overtime wins and cincinnati was down by 5 points with 40 seconds left. It was absolutely incredible. It was weird with cincinnati because the coach on the other team called a timeout which allowed cincinnati to set a play which is right there. Thats it right there. That almost didnt go in. He threw that up. This great kid threw that up with. 2 seconds left. Georgia state too . Georgia state is cool. Coach dad fell out of his chair because he hurt himself celebrating so bad he couldnt move. Yeah and you know what i only had baylor winning one game so im okay with Georgia State winning that one although i hope i think xavier might play Georgia State now and im hoping for xavier. Theres the Georgia State footage. But you just cant, anything can happen. This is a good scientific test though. See North Carolina was up by 15 points over harvard. I can never believe those egg heads can play basketball. They won by one or two points. I have to tell you something, i had drinks at the harvard Club Last Night and they were going crazy and they expected to be happy for like five minutes. You were having drinks at the harvard Club Last Night how does that happen . Your life is read were way late. We got a break. I was up very late last night. Coming up, new data on alzheimers. This drug could be a big driver for shares of biogen today. Those details, next. 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. under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. Welcome back. New data out from biogen this morning. Meg has the details. These are highly anticipated data because we saw results in december and of course theres nothing out there that helped stem the declines in alzheimers disease. What analysts are saying this morning is the data look to meet the very High Expectations set for the study. Biogen stock has been going up since december. So expectations were very railroadvery high. There was a reduction in the plaques in the brain thought to be associated with alzheimers and there was a reduction, a stemming of the cognitive decline on two measures there and they seem to be very statistically significant. Analysts were looking to see how strong the data were and they look to be very strong and look to be associated with higher doses. On the flip side of that why were not seeing shares soaring this morning is there were side effects and analysts are saying there could be some worrying about the side effects on the higher doses of this drug. Its associated with brain swelling. You can get these microbleeds or leaking in the blood vessels. Thats what analysts are concerned about. So looking to see what the right dose is to take this forward but encouraging to see benefits in such an early study and on these results theyre going to move forward this year into a phase 3 study. So youre talking about reversing the hands of time at that point. Youre not just talking about slowing. So what an improvement in cognition means is its compared with placebo. Declining on one scale is 3 points. If you take the higher dose youre declining by about half a point. Youre still declining but at a slower rate. This is measured through the cross word puzzles . Theres a couple of different things. Theoretically things similar to that right . Yeah. I just wonder how its standardized and whether the resolution that you see was it a big improvement . It looked to be a big improvement but its a small study. Across all doses and placebo 166 patients. So thats one of the questions. Was it Strong Enough this is a real benefit . It does look statistically significant. Thats why the phase three is so important. Hard to interrupt but with cancer drugs you see six month survival and its sewing efficacy. So its hard. Theres a lot of skepticism but theres a lot of hope here. Thanks. Still to come this morning former chief economist Paul Mcculley and his first interview since leaving the bond giant. Plus john taylor and global hotspots. Ian bremmer offering a unique view of the world and areas that should have us worried. Stay tuned if you want to worry a little bit. Were back in a moment. Help brazil reduce its overall reliance on foreign imports with the launch of the countrys largest petrochemical operations. When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. 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 . Welcome back, everybody. Ever wonder how many calories are in your shot of whiskey . Labels on Johnny Walker scotch whiskey and smirnoff vodka. Diageo hopes it will reduce alcohol misuse and also adding things like how bigs of of a serving is. Those labels will hit shelves in the United States in the next few months. More booze news this morning. A descendent of the founder in charge of the whiskey old forester to rejooufuvenate the brand. Also on top of a 30 million for a new distillery in louisville kentucky. Brown foreman stock now up over 130 . The sale of bourbon in the u. S. Has surged in that time. Here himself is the newly named head of that is not campbell brown. Not that campbell brown. Good morning, congratulations on the appointment. First of all, just as a Family Member you want to go with the joke . No no. Just ignore it. Im ready. Campbell brown doesnt get confused in this case. But a Family Member whos watched this Company Since you were a little child, is this something you always wanted to do . And was it frustrating before that there wasnt a Family Member running it . What did you think of all that . Well i actually always wanted to be a hockey player. That really failed miserably. Yeah ive wanted to be here. I spent summers interning in the mail room and rnd. Theres always been a brown Family Member at brownforman. So there wasnt any anxiety around not having somebody involved with the old forester brand. Its been well looked after since 1870. Im just very happy that today in in 2015 here i am leading the company nap is exciting. Youre putting a lot of money behind the brand. Whats happened over the past couple years . There has been a huge bourbon craze. Sort of got to enjoy the same wave. Well yeah. Theres been an explosion around bourbon. A lot of interest. Consumerdriven for the most part. Old forester, were talking today about old forester. But this brand has been on a nice upswing for the last three years or so. And the momentum continues to grow behind it. And i think were actually well positioned to take advantage of these trends as they continue to grow in the United States and then overseas. Now, half of the volume is in kentucky and alabama right now . Roughly half of the volume is in alabama and kentucky. Thats correct. Clearly thats opportunity for you to change those numbers drastically. What do you need to do beyond the investment youre making in terms of marketing . Yeah i think the first thing is youve got to make sure the product is available. And so in markets in the northeast, Brooklyn New York wicker park, up in chicago, on the west coast. The restaurant and bar business were already seeing a boom in our business there. And we want to continue to kind of fuel that as well as make sure in the retail environment that brand is seen. Its visible, available. And thats what our distributor partners and our Sales Organization and my team are working on right now is really just making the product much more widely available. Campbell hockey. Youve got some down there. Do you have the cardinals going the long way . These were the hard questions i was hoping you werent going to ask. How much do you hate the wildcats . I dont hate the wildcats. You said that. But if but do you love the cardinals more . I love kentucky basketball. You sound like a governor. You sound like Mitch Mcconnell now. No wonder they put you in charge. I am a season Ticket Holder to the louisville cardinals. I got them today. But i dont have them going that far. Although youve had so much recently. You cant win every year. You can never have enough. All right. Hes a hockey guy. Thats funny. Thats great. Congratulations again. Thanks so much. Thank you for having me on. Coming up veteran economist paul mccauley. I just want to see if hes got the beard and hair back now hes not working again. He speaks out in his first interview since leaving pimco plp. Well talk about fed, markets, and more. Stay tuned. Its march madness for the markets. For three good a week of big shots, winners, losers, and a fed bracket buster. Famed economist Paul Mcculley with his squawk plan. A new ceo for shamu. Seaworld hoping new leadership will turn the operator around. And living the life of luxury. Tiffanys set to ring up Quarterly Results. The second hour of squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Welcome back. Wow. To squawk box. We are first in business worldwide here on cnbc. Im joe kernen along with becky quick and andrew ross sorkin. And we have some happy music youre hearing this morning. It is International Day of happiness and its a friday. And are you out monday . I am out monday. So many things to be no im kidding. Oh, wow. Many things to be happy for. March madness, the first day of spring. Youre off friday, too, next week . Yeah. So andrew has a lot to look forward to. First day of spring. Were going to have snow on our first day of spring. Like six inches of snow. And we have as our guest host you live in Newport Beach but you have a place in poconos. The recently retired Paul Mcculley formerly at pimco. Hes going to be with us for the next two hours. Good guy to have because we microanalyze everything the fed does. The futures at this hour after a tough day yesterday. Leisman said yellen had high fived some people getting a 200point gain when she removed patient. Then people took another look yesterday and sold off. But today were up 102 on the dow. The nasdaq up about 19. You dont need to pro mow when im out. Then it just you dont want to give the viewer a reason to sleep in in the morning. I actually was promoing. Among the top stories this morning, lets tell you whats going on. Nike earnings beating the street. The retailer selling a higher margin shoes and apparel. But warning the stronger dollar will take a toll on its current quarter. Staff members at the ftc were in favor of suing google for violating antitrust rules before the agency settled its investigation back in 2013. The paper cited a confidential ftc staff report which actually ordered that google illegally took information from rival websites to improve its own search results. And amazon winning approval from federal regulators to test a drone delivery service, at least a drone outdoors. They will allow a test flight over private rural land in Washington State. But theres one major caveat in the whole thing. It has to be within sight of the person who is using the controller which sort of makes it hard to deliver stuff. Test for delivering things. Normally though you would think that would be a good thing if you are flying a drone to see where youre flying. Makes sense. However, its not going to work for remote delivery if the person is standing there watching it get delivered. You might as well have the guy delivering. Nbc i looked the other night and see where the cyclone hit. And flew a drone over the areas. It was i mean it really gave you a much better look than you would normally get. Although News Coverage has been one of the issues. There was a marathon they were running and i forgot where it was, but a drone that was covering it for news purposesrunners. Right. It fell and broke . It hit one of the runners. Because it was so low . I dont know. But it caused some injury. In places where that wouldnt be a concern, youd get much better shots of the entire surrounding area. Have you ever seen the shot of the drone thats like inside the fireworks over the hudson last year . Go on youtube. Mind blowing. Really . See, fireworks on camera or on a screen dont do it. You got to see them. Its like youre inside the fireworks. Ive take an video of fireworks. It doesnt do it. Let me tell you about another story this morning. Shamu has a new boss. Seaworld naming a new ceo. The largest family owned theme park operator. Seaworlds been struggling because of falling park attendance. Weak earnings and bad press about the idea of having captive whales. And currency call from Goldman Sachs today to tell you about. In a note this morning it says the greenback is set to extend. The dovish fed would only provide near term respite. But its seeing pressure on em currencies commodity price weakness and low inflation. Thats the perfect intro to our guest host today. Joining us on his first interview since stepping down from his post at pimco last month is Paul Mcculley. Great to have you here. Wonderful to be here. Obviously youve been a guest who we loved over the years and enjoy having on set. I want to talk to you about the dollar. Youve been pounding the table about a strong dlafr forever. You are retired again and you are a young man. 58 years young. What happened . I know you went back to pimco because you were Close Friends with bill gross. Why are you leaving again . I think you answered your own questions in some respects. I was retired for over three years. I retired at the end of 2010. Was enjoying life. I love macro. I write. I speak. I do this show from time to time. But the big thing i do is write and speak the macro. I was doing that. Bill was in a unique situation last year and bill is a close personal friend of mine for a quarter century. He came to my home and we spent a huge amount of time together as friends and out of that we created a position for me at the firm. So the existential reason i took the position was bill. And so it made sense to me after a reasonable period of time after bill left to return to retirement. When you say reasonable amount of time you wanted to stay with the firm and just keep things on even footing for awhile . I didnt want to be part of the news cycle last fall to put it bluntly. There was a large news cycle if you recall. We do. We recall well. Is there a chance you would work with bill in the future . Ive said publicly no and ill say it again. I spend time with bill. Bill and i spend more time talking about life than we do about macro and markets. But i have no plans whatsoever. I do not intend to work with bill again. How do you think this all plays out . How do you think pimco looks without bill five years from now . Pimco is an easier answer than janis. I think pimco will flourish. Bill was a founder of pimco along with two other gentlemen. And its an amazing franchise. It has an Incredible Group of smart people a great track record. The firm is in position of transition now from a founderdriven Partnership Culture to a franchisedriven corporate ethos. And its a Natural Evolution in the history of the firm. Bill built the franchise. The franchise is amazingly strong. And five years from now i think the franchise will still be strong but it will be managed in a postfounder environment. So im bullish on pimco as an entity in some respects because of the beauty of what bill created. Paul lets talk about the dollar. Lets talk about what you think may be happening right now. Because we have seen the dollar rise significantly. And theres some people who are now saying that now that the fed has spoken okay, thats the end of the massive run for right now. What do you think . I wouldnt disagree. It could be the end of the mass irun for right now. Thats a shortterm call. But by biggest call last year at pimco was were in a secular bull market for the dollar. That the United States is escaping the liquidity trap. Hats off to ben and janet for an amazing job over the last six years of doing that which the textbooks said you couldnt do which is get out of liquidity trap with Monetary Policy alone. Without fiscal policy. And a strong dollar is a natural consequence of America Emerging from a liquidity trap whereas europe and japan still are stuck in liquidity trap. So you have very different environments in the United States versus the rest of the world. And you have a very different Monetary Policy. So you can look at it the currencies in some respects like stocks. And the dollar is a growth stock. And Growth Stocks over time will outperform utilities. We certainly hope so. So i think the dollar is in a secular bull market. I think that europe will be stuck in a liquidity trap for a long period of time. I think mario is doing exactly what he should be doing. Hes got a really lousy hand of cards. Hes doing exactly what he should be doing. Should be doing a heros job there. What matters is the fact europe is going to be stuck against the zero lower bond for the a long time and americas not. Like weve got the better stronger economy and stronger currency. All those things are wonderful unless youre trying to export. If youre a big Multinational Company who is intent on export or is selling things overseas and has to repatriate that money back here and take a hit on the currency, it could suddenly look like not such a great thing. From a macro perspective, what do you think it really is . Its not a Success Story for every part of our economy. And if you are predominantly an exporter, life has got a little more difficult because youre the priciest guy on the block nap is what the currency is about. Is youre the priciest guy on the block so you have difficulty selling like you used to because your price went up versus everybody else. And you have to deal with it. From the standpoint of the macro economy, thats a Success Story for america. If the average american has got a job and is getting a raise which is the objective function for the fed and our economy is humming and you actually have people who are exporting having a little bit of a hitch in their get along, give that to me all day long. Sfl at the the only way mario draghi benefits in this situation is from a currency war. The euro continues to get devalued, that will help his economies in turn. Is there a point where we either import some of the troubles that theyve had or again give this to you all day long with the great strong dollar unless its meaning theres not as much capital being put back into the United States nap some of the Major Companies here would look overseas for expansion and would be looking to do things there instead of creating jobs at home. I think it does have a negative effect in some sectors of the economy. And also puts downward pressure on inflation in america. And the fed would actually like inflation higher. So there are aspects of it that are not positive. But the net of it is positive and actually for what we do every day in the marketplace, it implies a kind and gentle Monetary Policy for a longer period than would be the case without it. So actually in many respects wall street celebrated two days ago exactly the negativity that youre talking about. But you say exporters may be a little bit weaker but the feds going to be kind more than we thought. You put those things together the stock market goes up. You have a low bar for an economy thats humming . You used the term humming. Janet yellen said im removing patient but were downgrading what were seeing. Is 2 humming . Or is it just the best house in a bad neighborhood . I actually think its a pretty nice house, joe. Well is then what was she talking about . If why did the market take it positively and go up 200 points on the notion that shes going to be very patient because the economy is not that strong . Its not a gang busters well humming is a gang busters word. So were arguing about adjectives here. Sort of. She didnt say humming. The most important thing that happened in the change in the forecast wasnt in my view was inflation. The reduction of the growth or the reduction in the inflation. It was the reduction in their estimate of the full Employment Unemployment rate known by us as naro. Took it down by 30 basis points from a range of 53 to 55. So essentially what she said is the speed limit for improvement in our job market is a lot faster than we thought. That is a good news story that we can have 5 unemployment and not have any word about inflation. Where did it start when they said theyd raise . 6. 5 or something, wasnt it . That was not the estimate at all. That was the threshold they put into their forward guidance. We wont even think about increasing the Feds Fund Rate as long as were north of 6. 5 . And charlie of the chicago fed gets credit for pushing that through. When you lower it to 5. 25 you feel its fake all of the things everyone says about the Current Employment picture that it doesnt compare to 5 . Well i think thats a useful observation, joe. Thank you. Thats as much as youll give me today. Of course youre always thinking i always use the word humming and you took humming, i dont feel like 2 is humming. I think its the most tepid recovery. Because you have the history of as many years as i do our economy is humming in the context of the rest of the world right now. It is not humming relative to when both of us could still dunk the basketball. I cant. Could you . No could you . We still have about 1 hour and 45 minutes left with him. This show is humming. There you go. When we return well talk about the blue box and the blue box profits. Tiffany just reporting results. Is the falling euro is problem for the luxury retailer . Well talk about it when we return. Financial noise financial noise financial noise now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back to squawk box this morning. Tiffany saying sales were hurt by stronger dollar. Ike covers the story for stern ag. Good morning to you. Help us. Whats your big headline on this . Yeah. I think honestly when you look at the quarter, they preannounced holiday sales. The tax helped them by about 5 cents. The gross margin missed. The standout is after giving their initial view of 2015 just a few months ago, theyre already lowering that a little bit. And theyre also calling out the q1 will see earnings down a bit. That puts the street at 92. So theyre creating a hockey stick kind of improvement for the year switch a tough setup. You think of this saturday tiffanyspecific problem or you think of this as a broader problem . This is a barometer for the whole industry . I think a lot of it is top down. If you look at a lot of the Luxury Brands and the Jewelry Companies that reported for holiday, just kind of across the board you saw slower results for holiday. Especially with the International Player and luxury players. Weakness in hong kong weakness in japan. Youre seeing it across the board. In the areas of marketing and things like that. I do view this as big top down. This is a currency issue in your mind . Currency is definitely impacting the model for them. Remember, 50 of their sales is overseas. 20 is in japan. And about 15 is in europe. So the euro and the yen are not going to help results. In the u. S. Which is 50 of sales, 25 of that is tourism because it gets impacted by the swings as well. Theyre definitely impacted by the changes in currency. We heard earlier this week that chanel was going to be raises prices. Will customers buy . You know if i read right, chanel is looking to raise prices big in europe and take them down big in china. I think the currency fluctuations are changing this. Tiffany has done a good job with their pricing strategy. Well have to wait and see on the Conference Call they address that in more issue. Ike, were going to leave it there. Thank you for joining us this morning. Coming up winners and losers and bracket busters as well. Only one day into march madness and already big drama, big upsets. Is any work getting done while the games are on . Some of those stats next on squawk box. Take a deeeeep breath 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] never before has this kind of passion this kind of innovation, engineering, design and performance. Been available. For this kind of price. The 2015 cla from mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz financial services. 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 . Welcome back to squawk box. March madness has arrived. The ncaa tournament is off and running and that means some lost productivity at work. This does not include when people were doing their brackets and looking at rpis and pmis and everything else. Its estimated corporations suffer hourly losses of 1. 9 million. I think thats low. And two games that may have taken eyeballs off of work notre dame was able to avoid a big upset to northeastern after being the hottest team coming into the tournament. I dont know what that was all about. But the biggest bracket upset which affected me deeply because i had iowa state going to the final four by they had come back. They were living on the edge. They came back like the last four games. Anyway, they were beaten by uab. By the uab blazers. There were a couple of 14 seeds i think that beat 3 seeds. We still havent had that 161. I dont know if that happens. Did you do any brackets . If you can dunk you must have done brackets didnt you . Actually i had my brother whos two years older than me do one for me for a pool i was asked to be in. And hes a rapid duke fan. So i actually dont know what my bracket is but im quite sure when i asked my brother to fill it out that duke is going all the way. I didnt even look. Someone just tweeted that i could dunk in 1985. I would like to clear that up that was paul. I have been able to touch the bottom of the net if i really if i jump as hard as i can, i can touch the bottom of the net but thats it. Thats the best ive ever done. I couldnt do it now unless they have one of the things. The bounce write trampolines. Should congress pull the strings at the fed . A debate over whether the central bank needs tok micromanaged. And take a look at u. S. Equity futures. Hello. I am technology that is changing investing forever. I am a fully automated Investment Advisory service. I can help you choose the right portfolio. Monitor it. And even rebalance it. Ive been called innovative. Revolutionary. And just plain smart. Id blush at the compliment if i could. But i cant. So. I wont. Say hello at intelligent. Schwab. Com opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box, everybody. On this first day of spring which officially begins at 6 45 p. M. Eastern time. But winter is not going away quietly. The new york city area expecting a few inches of snow starting later today. Oh goody. Lets get to the top of the summit of todays stories today. New data on biogens drugs. Reporting reduction of the levels of plaques in the brain came about also showing a significant slowing of cognitive declines. Darden earnings beating the streets. And reuters says its websites are inaccessible in china today including those in english and chinese. Other news websites have also been inaccessible in china for some time. Check this out this morning. The als ice bucket challenge may have found a successor. Kathie lee and matt lauer talking twizzlers this week. Two people start on opposite ends of a twizzler and they meet in the middle. Lady and the tramp style. No andrew. You and joe. Yeah you guys do this. No andrew. Look at that. Come on, buddy. Im going to just back up a little bit. Push myself back out. Go ahead. Come on. A growing course in congress chicken. You know i would, but john taylor is here. Seriously. And i want to see between these two guys weve got both sides of the universe covered. Youre going to leave him hanging. Youre going to leave me hanging like this . Yes. Come on. Thats not nice. Becky will do it. Listen to me im not opposed to it because i dont you know we love each other, i know. No. Oh. No . Lets wait. Lets wait until we can really get into it without cameras is what im saying. Lets wait until the end of the show. Everybody stick around. That might work. You know that it was matt and im not going over. What do you think . Youre right there. Beckys husband is a producer of the show so its complicated. Your husband is a producer of the show . He is. I didnt realize that. If i didnt know him, maybe. Congress is calling i dont like the strawberry one. I like the ones you can peel. So its a flavor . Well work on it. Grape flavor is what you want . Work on that. Calling for the fed to take on a more rulesbased approach to policy. Like hard wiring the widely followed taylor rule into law and yellen was asked about this issue earlier this week. Heres what she had to say. With respect to Monetary Policy rules, they can be useful and i find them useful and long have as a kind of benchmark for thinking about what might be the appropriate stance of policy. But to chain a central bank to follow a simple mathematical rule that fails to take account of many things that are very important in making Monetary Policy, that would be a very foolish thing to do and i oppose it. So that was yes and no what i heard there. Then the next there is an argument that some people make the current Monetary Policy seems to be strategy free. Especially when you look at the Global Economy. What i would say is if you have a dual mandate, you basically can say or justify or do anything you want. Because theyre on opposite sides of the spectrum. And you can always have a reason for doing something which allows you a head i win tails you lose. I think thats the problem, joe. Basically can put up the goals but you dont say that youre going to do to achieve them. You dont say what the strategy is. And as a result things have gotten pretty strategy free. No ones telling the fed to chain itself to any rule. These proposals say the fed, its your job to choose the strategy. Just tell us what it is. So there could be some responsible oversight. But we feel lately that theyre telling us too much of what theyre doing food. I remember the old days volcker and greenspan, theyd come out of the blue. Would they wouldnt they raise . Now we know it takes two days to say we might remove patient from a policy guide. We know everything theyre doing. Good for you. I think theres e mornormous amount of words going on out there. Impatient, patient. It just extended time. Of course it changes all the time. The socalled forward guidance. It changed at least every year since they started it. Thats not a strategy. Thats just one tactic after another. Youre not talking about congress auditing the fed either. Youre not talking about Congress Getting involved. No. The question is whats the best thing for congress to do. Whats the best thing we can do. I think a straight audit is the answer. But say look fed. Tell us your strategy. What are you up to. Its your job to do that. Thats why youre there. You can change if you want to but tell us why you change. I think it would get more of a strategy in there. Get it around the strategy situation were in where you can see a lot of volatility. John what you bring up makes a lot of sense. However, you do realize that some people in congress will jump on that and use it as an excuse for an audit of the fed and some of those people dont think the fed should exist. What do you think about that line of thinking . I say there are people like that. But i think for the most part if you talk to the members, theyre looking for something more constructive. And this is not a blanket audit. This is actually very specific thing where the fed has responsibility. I think its kind of just about the right balance here. Its the fed gets to decide. They just have to be accountable for it. And it gets to what joe is saying. Right now they can do anything. They have that goal which is good. They can do anything. So this idea of a strategy for the rules i think makes a lot of sense. We have talked a lot and ive talked to former chairman Alan Greenspan a lot about Big Government whether its the fed or whether its obamacare, whatever you want to call it. Government activism that weve seen. And he has actually anecdotal or Empirical Data that shows its been part of the reason for the tepid recovery weve had for the first six years. I know you share that whereas this is where i said you guys are so opposite. I dont know. Is canonization of bernanke and yellen not enough . Or what would you i mean when you come on they are the two greatest heroes ever as if you can see the future and know theres no negative consequences from all this. Some people would say there have already been negative consequences in this on how hepd growth has been. You also have to remember how we got into this. Remember those too low for too long Interest Rates in 2003 and 2004 dont forget that when youre doing this. I bet he doesnt think that caused anything. Do you . I think the big issue that happened during that period of time wasnt too low Interest Rates. It was too laxed regulation. Surprise youre saying that. No. The bubble wasnt because Interest Rates were too low. You were make loans to guys that should be called renters. So theres a faculty issue of the Banking System run amok. Now, actually if you have too low Interest Rates, that will exacerbate a problem of run amok. Combined with a stated federally mandated push for higher homeownership. That was a factor as well. So i like at the bubble not as a result of low Interest Rates or too low Interest Rates, but a whole mosaic of things. I would put at the top the regulatory environment. But the mosaic does include this. The lax regulation thats another example of unfortunate intervention. Breaking the rules they should have been enforcing. But i think those low Interest Rates, you look at it. A lot of studies done now, a lot of consensus growing. Of course the officials dont agree. They were pikers compared to what weve done the plast six years. Those guys were tight. So you could make the case that sooner or later something bad might happen from this. I think a lot of people concerned about the balances the situation is causing. And how we can get out of it. Hasnt been yet. Thats not the main issue. I mean theres a lot of the housing issue of course wasnt just inflation. But it was a whole wide range of imbalances, century for risk taking that led to the problem. You dont always know where theyre going to show up. You can see some volatility around the world. We talked about this the last time you were on. The victory lap is complete. Its settled. Its done. And theyre heroes. Whereas there are still a certain number of people who think its going to be tough getting out. And we dont know five years from now looking back whether i mean who knows whether something wicked this way comes from this. I would assume something wicked would happen in the next five years. Because life goes on and wicked things happen. I think that getting out of a liquidity trap is a huge victory and i looked at what happened earlier this week with the removal of the word patient as a they got out of calendar driven Monetary Policy forward guidance, into essentially data dependence. And were only half done. Removing the word patient doesnt mean were normalized in rates. Were not normalizing yet. But essentially you had to get away from the calendar guidance before you could start the normalization process. A little back and forth. One kind of guidance to the other. This is where they are now. Who knows where theyll be next time. You also want to think about when you say whats good. Think about the 80s and 90s. I heard you say when you used to play basketball. Those were good times. You could dunk. And that was a different type of policy. All across the board. Thats what id like to get back to. He said the economy is humming. I would certainly like to have stronger growth but i dont think you can say that because we had strong growth 20 years ago or 25 years ago that automatically that we can get back to that growth rate. But the bigger issue i have is i think youve won, john. I think you actually have won. Youve already made the sale and youve won that your rule is hard wired into Monetary Policy particularly since 2012 when the fed actually moved to the famous doc plot. Up until that point you had to guess what their parameters were for their tailor rule. And the dot plot which none of us particularly like had the redeeming characteristic of forces them to put their parameters in. And that longer term dot is you, john. So everything is relative to you. So youve won. You dont need to sell anymore. I dont care who won or loss right now. But i know weve got to get back to a better economy. And dont be so pessimistic. Policy matters. All across the board the kind of things joe is mentioning. We can get back to stronger growth. We can have at least for awhile the a recovery like we had in the 80s. Its not just magic. Its because of the policy. Thats what youve got to do. I think we could have stronger growth but i dont think its just because we had stronger growth in the past. Right anyway the way you get stronger growth would be a different thing than what you did 20 years ago. Which would be a robust Public Investment to increase aggregate. Economics doesnt change. More rely on markets to try to keep the government cost benefit analysis. Public involvement. Youve got rules. I mean it hasnt changed. And we just got to get back to that philosophy. Im a capitalist. I retired at 52 years old. I was a successful capitalist. I believe in capitalism. Just saying it doesnt make it true. You also paraphrased some weird gross has some ridiculous term for it. Its like a welfare state capitalist or something. Krugman said that. I was like wait a second thats like a birth controlled pregnant person. It makes no sense. Im actually a bleeding heart capitalist. You called it Something Else before. Oh principaled populist. Thats not a contractiondiction in terms, joe. It is to me. See where it really affects people and where they end up. Instead of being virtuous on the front end. Look at the effects on the end and then get back to me. Are you guys going to go for it . These guys. You guys are sitting right next to each other. No. Theyre the ones arguing. Noif idea what game youre playing with these things. Twizzler. You didnt want the video we had . Matt lauer and kathie lee went like this. Its not a long enough twizzler. Its not. The only person i would do this with is my wife and maybe my kids. Im not going to do it with you. Im putting my foot down. Fair enough. I agree. I wont do it with you either. I used to think you guys were together. Next time. Thank you, john. Much more from Paul Mcculley when we come back. Also when we return global hot spots that need attention. The course of Irans Nuclear program. Weve got elections in israel and where in the world was russian president vladimir poout someone trying to answer some of those questions when we come back. Also mark m oobius talking to us in the last hour. The russian market is the big question mark. Because if the europeans and americans continue the sanctions, then the ruble will probably continue to get weak or maybe even weaker from where it is now. And of course that is affecting the market in general. When the moments spontaneous, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Ask your doctor about cialis for daily use and a free 30tablet trial. Welcome back to squawk box, everybody. On this friday morning it looks like the futures are indicated higher this morning. In fact, theyve been building through the course of the morning. Right now looks like dow futures are up 126 points above fair value. S p up by close to 11. And nasdaq up by 26. Meantime the clock is ticking on international negotiators attempting to forge a new deal with iran on the scope of its nuclear program. That is one of the headlines capping off the week. Ian bremmer is the founder and president of the group. Thanks for being here today. I feel like we come to you often when we feel troubled. This is a more troubled time were facing. How big of a deal is this potential deal with iran and is israel splitting off . What do you think is happening . Its not a great deal but if the deal falls apart, thats not great either. Which of my eyes do you want poke me in . Right . Seriously. You get this deal done and the iranians will still have break youth nuclear opportunities of 12 months maybe 15. You could imagine in two and three years time the sanctions are off, what if they decide they want to break the deal at that point . They could become functionally nuclear. Can we reset International Sanctions and theyll be stronger economically . That sounds bad. But if you dont do the deal and no one is talking about this side of it. How long do we think we can maintain these sanctions on iran . The only reason the europeans have been supporting it was to push them on negotiations. Their economy is not doing well. The chinese will follow as soon as oil prices go up. So you think that the u. S. Is actually pushed into a position where its a nowin situation no matter what happens . It sounds as though you think netanyahu was right. That its not going to work. I think netanyahu is right from a more limited israeli perspective because this is more of a threat to israel than the United States. We tolerate a north Korean Nuclear program. We dont like it. But also longterm if you are starting to invest in iran the likelihood that the iran government starts opening up more and lets face it 50 years of sanctions did nothing to open up cuba. A couple years of us flying in and throwing in starbucks and theyre not going to last very long. Although people will say that the sanctions were working in the course of they were working to some extent. It got iran to the negotiating table. Thats right. And the point is if negotiations then fail and the iranians go functionally nuclear, the hard liners are going to be stronger in iran. So thats the dynamic too. But this has gotten so far. The iranians have developed so much that the idea that were suddenly going to take away their ability to enrich and i accept the white house on that point. The problem is that kerry really is seeming to want this. He tried israel palestine. He failed. He thought he should be president and thinks he should get the nobel prize. And i think you dont want a secretary of state that feels he might even run again too. God help us. Thats the problem. Kerrys done i criticize kerry on not being coordinating with the white house on things. On iran he has been coordinated. But the optics havent been great. You live long enough to see a lot of weird things. By iran notwithstanding, looking at the relationship between the United States and israel right now and did you ever think youd see the day where we would say were not going to shield israel from u. N. . Were not going to use our veto power . I mean were to me it was a day i never the one stable democracy in the u. S. And a longtime ally. Almost even on philosophical ground something about the i was very surprised when Vice President biden went to iss reel to see netanyahu that while he was there the israelis announced more settlements. I was surprised to see netanyahu come to congress that was a negative. I was surprised to see the white house were you surprised when the president said wouldnt you think someone in he white house would tell him to call netanyahu either way and congratulate him . He did call him. He didnt call him immediately. He did finally . Oh he did . I dont think it was refusive lets understand that israel and palestine, those peace talks are not just dead. They have no hope of restarting. Who would be your proxy on the palestinian side at this point . Its not just that. It is that youve got over 300,000 settlers. Some in places theyre just never going to leave. That the israeli left used to be about the peace movement. Today the israeli level doesnt want ta peace movement. Left on economic issues. The palestinians no longer have a functional way to attack the military. You live in israel. It feels pretty damn secure. It feels better than parts of manhattan. If youre not netanyahu, youre not arguing for trying to get the peace talks restarted. The fact there are headlines saying he flipflopped. He didnt. He didnt at all. He just said i can still imagine a twostate solution. You have the commission for one now. The left even though now he i would think now hes coming back as saying i would think theyd be happy and celebrate. Now theyre mad. I dont know what they want. Theyre not happy because its not credible. Theyre not happy because hes actually going in that. We didnt even get to russia so youve got to come back and join us soon. Too many things happening in the world. Sure. Thank you. Joe, before we go . Come on. Do it. Come on. Just put it in your mouth, joe. You know you want to. Youre leaving me hanging right here. But hes touched all of those. And youve touched them. And its a rainbow thing. Youre making some kind of su subliminal weve got to go. Were doing this for autism, come on. Coming up, another big hour of squawk box just ahead. We have some more euro trashing and will have you thinking about i mean not of the continent but of the currency about planning your next trip across the pond. I did the ice bucket with you. I just because i got to dunk you. This is different. This is different. This i did myself. Squawk box will be right back. 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 . The road. It can bring out the worst in people. But the mclass scans for danger. Corrects for lane drifting. And if necessary, it will even brake all by itself. It is a luxury suv engineered to get you there and back safely. For tomorrow is another fight. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. The swish for the swoosh. Nike moving up the earnings bracket. Will the dow component continue to be a slam dunk for investors . Plus more euro trashing. Well hear a bold prediction that could have you planning a european vacation. How you been . Long time never seen. And a canadian high. If you boys are looking to score weed go north. Thats where canada grows its finest green. How our neighbors to the north is turning cannabis to mega profits. Squawk box continues right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. Our guest host is Paul Mcculley. Spring officially arrives at 6 45 this afternoon here on the east coast. But 32 Million People are in the path of a lateseason snowstorm today. The line of the heaviest snow stretches through new york. Some areas looking for as much as half a foot of snow. So happy spring everybody. We are less than 90 minutes away now from the opening bell on wall street. Opens every day at 9 30. The futures now have improved from the last time we looked. They were 105 last night. Now up 140 points gaining back more at least so far this morning than we lost yesterday. And that would add to the big gains we had on patience day. Do we call it patience day . That may go down in history removal of patience day. Lets quickly look at whats happening. We said we were going to be euro trashing. We mean about the currency. Not about the continent or people. 1. 07 so it has improved. Not back to whatd it go to on wednesday . 1. 10. But now back down. Did it get to the 1. 04 area . I only saw 1. 05. Mcculley, you stale think from parity and beyond even. In the fullness of time. How much time . We can wait. In the fullness of time. Not necessarily immediately. Right. Can you imagine because youve been over there where youve come back and its like 1. 40 when it was. It really hurts when youre paying hotel bills. Can you imagine where you go over there and its less than what youre putting in . That would be good wouldnt it . I remember when that happened a number of years ago. When you could dunk. Not that far. But actually at that 1. 20. 30,. 40 area you could as a visitor say this is expensive. So actually you dont have to be an economist at all. You can just say this is expensive. An espresso and a croissant in paris is 28 if you leave a tip. Its like you know thatll get your attention, right . Yeah. You lose weight. Okay. Weve got a bit of deal news this morning. Simon making its final offer. The final deal 95. 50 per share in cash and stock. The company also saying it will walk in macerich does not respond to this offer by april 1st. So mark your calendar for next week. European leaders are meeting with greeces Prime Minister in brussels. The eu saying greece is committed to drafting a reform plan soon. Also bank of new york mellon to settle Foreign Exchange chases. The bank overcharged Pension Funds and other clients for current si services. Then weve got this story about amazon. Amazon testing delivery drones outdoors. The faa will allow test flights over private rural land in Washington State. That does not mean however, youre going to get deliveries from amazon just yet. Nike shares surging this morning up almost 5 . Thats part of the move were seeing in the dow. Because it is a dow component. I knew that. Reporting a 16 jump in quarterly profit thanks to higher demand for its apparel, basketball, and Running Shoes revenue. Here now to break down the results, michael benetti. Mike, thank you. Good to see you. Good to see you too. Thanks. So future orders are something the stock always keys off. Its hard to predict. And maybe even harder to understand. But explain it to us why thats important and how what we saw this quarter with future order. Sure. Great question. So future orders is orders from nikes retailers. It serves as a leading indicator for revenues for the company. The stock will take cues from that as to where demand is going. This quarter the futures growth rate excluding this quarters futures were up 6 . Orders from i would say general retail who are dont typically sell Sporting Goods products a year ago against the world cup. Globally were up about midteens. If you exclude that impact of the world cup a year ago. So underlying trends for demand here for nike product are very strong. I dont really understand why. You say that current were backing out currency. But is it because the rest of the world is just in a better position in terms of growth that all of a sudden people are able to think about buying more nike shoes . Well its definitely a secular share gainer of a category. Weve seen, i guess, the anecdote we look to is that you know, people are wearing more athletic silhouettes. More women are Walking Around every day in Athletic Apparel than jeans. I know nikes womens apparel business is doing really well right now. So how does it break down now between sneakers and Athletic Apparel . Its interesting. We talk to retailers, we hear Phenomenal Growth rates for the orders they plan over the next year. When we kind of stop and say, okay, but a lot of this has to be driven by categories like apparel or womens apparel in particular. How much can the footwear really be growing . Were hearing very good growth rates for the footwear as well. Its what nikes known for. Its where they have the most differentiated product. Its selling really well. Particularly on the basketball side where they have 98 market share. A couple weeks ago they reported samestore sales growth. Hey, mike i got to cut you off because i know youre talking about nike but we have people outside right now who apparently have nike sneakers on. I see some under armour out there too. Watch this. This is crazy. This is what theyve been doing the whole time you were talking. Way to go guys. They ran by before. Enjoy. Well done. Sorry to interrupt, mike. But, you know. Kind of fun to watch. That was fun. We were a little amused. Were easily amused. Thank you. Thanks, mike. Wow. Okay. Those people know how to work out in the morning. In addition to nike a few other stocks on the move this morning. Biogen getting a boost. The company reporting positive data on its experimental alzheimers drug. And tiffany warning the strong dollar is expected to have an adverse translation effect on sales throughout fiscal 2015. And darden earnings beating the street handily. Profits topping the street. We will talk to an analyst in a few minutes. Plus check out shares of Mattress Firm getting a boost this morning as well. The companys earnings and revenue topping estimates. And a warning from ak steel. The company sees a larger quarter loss than forecast. Steel dynamics and new corps have also warned in recent days. U. S. Futures are now up triple digits as we count down to the opening bell. Where are investors finding bright spots of opportunity . Lets hear from chris wolf. Hes the chief Investment Officer at Merrill Lynch private banking. Does this make sense to you this seesaw weve seen this weekend and the fact futures are up . I thought it was about the shoe thing. Be glad. We could ask you about the twizzlers thing. Im not doing that. It looked good but maybe not. I think what makes sense to me is the market response so the fed action here. Weve had a long period of distortions here for the last several years. I think the Market Participants have been trained in some ways. So people have extrapolated the move in the u. S. No Interest Rates, no alternatives. Europe is doing the same thing. Doesnt work well in japan. But i think the opportunity for many people in this market is to think about where they are currently after years in the bull market. And do i need to reposition my portfolio . Its been a few years of clients chasing returns. Unfortunately they end up owning a lot of equity type of risks. Its time to rebalance. I dont want to suggest youre bearish, but youre cautious, if you will. Weve come a long way in a short period of time. Were sitting on the fact the remainder of this year in terms of gains are likely to be fueled by multiple expansion. Thats not a fun place to sit if youre a fundamental investor. Most of the opportunities are outside the u. S. These days which is what we talk to clients about. The last five years, its all been about two things. Long bonds and the s p 500. The Rearview Mirror effect has been pretty powerful. So talk to us. Whats that like . It looks like three things. The first is on equity portfolio. I think we heard some commentary about that. Thats the first. The second is and when you say you want exposure to europe and european markets or emerging markets, are you thinking of the big multinationals or are you going to go in country by country . We go in country by country and stock by stock. So we like things to have a lot of Free Cash Flow dividends. Yields are much higher. And down at the sector level, a lot of the Consumer Sectors are good. Its really about kind of the dividends and cash flow story. And the second theme which is to the point diversifying those sources of income burden of proof do you get income from . Its harder and harder out of u. S. Fixed income these days. Do you look at coupons, dividends, total return, derivatives where thats appropriate. Thats the second message around. And the last piece is markets have been so nar owe, so concentrated, a lot of clients own one thing. Theres a broader set of diversification for clients that want to concentrate here. And youre not sitting on cash waiting for the market to break. No. Theres a link to what you just said. It will look different than in the last few. Risk management is about one thing. Follow the trend. And diversification has been tough. Returns last year were in a north bound. I think Going Forward well have to be sensitive to what policy makers do and manage risks more explicitly. We want things that turn down pretty hard. Are you buying oil . Looks attractive if youre longer Term Investor at this level. There will be a lot of pressure to come out. Go ahead. I just wanted to see what paul thought. The big point that youre making is that the worlds going to be different the next two years. And the last two years. I certainly agree because youre at a huge divergence between the United States and the rest of the world as we were talking about earlier. Exactly. And its very rare when the decoupling theme is staring you right in the face. Yeah. And we have a decoupling of Monetary Policy cycling. Which is why the currency is on the move. But decoupling is actually for real. And that is a different strategy than the last two to three years. So i agree with you. Totally agree. I think your comments earlier with professor taylor were really about the rate function. There is some rate rise in the next few years, you see volatility respond nap will change the environment weve all become used to. Monetary policy will be different, but shouldnt we both if europe starts to recover, shouldnt both of us be similar in the fact were both growing again and they should be joining the party to some extent . Im worried we will start leaving the party as theyre maybe thats the way they diverge again. Youre sounding like a dove joe. Thats unusual. Thats no what i meant. He takes it all back. Youre worried about the fact we may get off with a zero lower bound . No i was thinking that as there are a lot of people recommending european stocks right now based on theyre going into what we were. I thought chris was kind of saying that when its not all about cheap money, you need to start discriminating. Exactly. Since its not going to be like that anymore. Were in a period of time where we think the next 12 18 months where it is a bit of the same movie playing over. You want to think ahead. The next bid is often pretty i can consider myself 3 . I still think thats low. If that was the terminal pricing of the quarter point rises at least talking about, i still think but in the new normal its not. 3 still seems historically low. The economy ought to be able to do just fine at 3 . I think we should learn something if you loan money to someone. I think we should have it at least zero real shortterm Interest Rates. If you have a 2 inflation target and you achieve the 2 inflation target, that says a 2 nominal number. I dont believe in the three or four that john articulates. But i think that two is a reasonable number when we get very close to where the feds goals are. So zero is not a natural number. If theres a question about that ask any of our parents who have a lot of cds and they say zero is not a normal number. Right. Chris, thank you. Youre going to be sticking around for a bit more. Quickly lets look at the futures again. Because after what we saw yesterday where the dow gave back over a hundred points. Its making up for all of that and more this morning with the dow futures now indicated up by about 140 points above fair value. S p futures up close to 12. Nasdaq up by 32. When we come back this morning, shares of darden also up sharply ahead of the bell. The olive garden one of the big reasons for the restaurant companys surge in sales. Well take a trip inside the menu. As we head to a break right now, look at betting on march madness. Those are big numbers. Squawk box will be right back e financial noise financial noise financial noise financial noise now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back to squawk box. Youre looking at a live shot of the white house and yes it is actually snowing. Were a week away from april and its snowing in washington, d. C. And apparently going to snow here right in new york city this afternoon. So there you have it. Also this morning, dardens Quarterly Results beating the street. The chain is offering an upbeat view of the future. The stock turning around sharply since starboard won a bitter battle with shares rising more than 30 since october. Joining us with his analysis is giuliani who covers the stock for morning star. Does the turnaround of the stock make sense . This stock looked like a mess for a long time. I think it does. And for a number of reasons. I think a lot of the initial turnaround efforts that starboard talked about whether its cost cutting or simple things for the top line growth whether it be online ordering or increase of alcohol sales, with the results today it seems its clearly paying off. There were comparisons with weather a year ago and other factors. But its clear that the starboardled initiatives are having an impact. I think the market is also waiting for some of the next potential catalyst here. Whether it be a real estate transaction, potential separation of some of their Specialty Restaurant Group brands. Thats what i was going to talk about. How much of the move in the stock actually has to do with the current performance and operations opposed to sort of some of these other i dont know if theyre pie in the sky ideas or not. But were all waiting on something. Yeah. I think a lot of the movement weve seen this past quarter probably was more on the promise of these potential transactions. But the results today being much better than expected both on the top line and the bottom line. I think the kicker were seeing in the early market trading today is also showing the fundamentals are part of the investment story here. Now, the improvement, though does that put any pressure on slowing down some of the other ideas . Yeah. Its interesting to see how it will play out. The company talked about starboard when they outlined their plans last year talked about the real estate transaction being four to eight months after the board transition. So itll be interesting to see what details you get on the Conference Call this morning. Right now were seeing a pretty nice turnaround in the fundamentals. Its interesting to see what the status of that will be. I suspect well still see them committing to a real estate transaction at least the first part when they talk about sawing off part of the portfolio before exploring a read or a taxfree merger here. Is there anything going on at darden that signals something broader about the economy . Yeah. I think with this one, i mean it is a good bramarometer of the consumer. It seems with gas prices coming down, weve seen some stabilization in that middle consumer. Bodes well for other players in that space. You know kind of that middle income tier. I think thats is pretty good indicator here of what were seeing. Who do you love in this space . Yeah. In the restaurant space right now, i think panera is my top pick. I think its been under pressure for a lot of neat initiatives theyre doing whether it be improving the look and feel of their restaurants, attaching themselves to more mobile transactions. I think it hasnt gotten full the the contract it deserves. Its going to take a bit of investment. But those will pay off for a 12 to 18 month time frame. Okay. Were going to leave it there. Thanks so much. Thank you. Coming up when we return, it may be time to plan that vacation. Some big predictions on where the euro could be headed next. And then find out why canada is winning in the weed business. Only jane wells knows and shes going to join us in the next half hour. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Over 20 million kids everyday in our country lack access to healthy food. For the first time American Kids are slated to live a shorter life span than their parents. Its a problem that we can turn around and change. Revolution foods is a company we started to provide access to healthy affordable, kidinspired chefcrafted food. We looked at what are the aspects of food that will help set up kids for success . Making sure foods are made with high Quality Ingredients and prepared fresh everyday. Our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. Working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. We are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. Until every kid has built those lifelong eating habits, well keep working. You recognize that, probably. T. J. Huggy. He works for at t now. He does . I dont know, the guy looks like him. Real estate whats his name . Ralph. Real estate buzz this morning. Politico reports president obama may be buying the magnum p. I. Home in hawaii. The luxurious beech front home was sold this week. It is said to involve a prominent obama friend and one of his major donors. I remember how incredible and how much that home reeked of 1 percenters. How much i wanted to live in hawaii when i watched that show. There must be a mistake here. You know with the way the president feels about wealth and 1 percenters i cant imagine he would i just dont think he would do that. No. But hes probably going to grow a mustache when he lives there. Thats a good way to defray my question. That was good. When we come back this morning, what will it take for the fed to actually raise Interest Rates . We have the catalyst that could force the feds hand . And how long until the dollar sees parity with the euro or how about the euro slumping down to 80 cents . Well get those predictions in a moment on squawk box. For now look at u. S. Equity futures. Dow futures looking like theyll open up by more than 140 points. Nasdaq up by 33. 5. Stick around. Squawk box will be right back. 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. Welcome back to squawk box this morning. Among todays notable analyst calls, honeywell added to the conviction buy list at Goldman Sachs. The price target now 120. Also in a separate call Goldman Sachs downgrading td ameritrade. And then overseas nintendo upgraded to hold at deutsche bank. Honeywell added to the conviction list at goldman. After 2008 and everything . And goldman . Anyway, now that the fed delivered its dovish message to the markets, what will it take to get the fed to actually raise rates . Steve leisman has put together a look at the ghost of fed rate hikes. You said youre really going to get into the weeds, here but you wont. In the weeds where i like to be. But really its going to be very wonkish . I dont think so. You tell me. You sit there and interrupt me because you always do. If its too weed y iyweedy. A new rule for figuring out how the economy would be ready for the first rate hike in nine years. You will me . So far, yeah. All right. Heres a screen that walks you through. Out comes patience. Comes the following phrases. Further improvement in the labor market. With the new long. Run rate of 5. 1 . And confidence inflation moving back to 2 . You good . Andrew you good . Yeah. Im more worried about you than i am joe. Joes been doing this for a dozen years. Andrews still trying to talk me into the twizzler thing. Ive got my twizzlers. All begs the question what is further improvement and what is confidence in inflation . The only way to tease this out is look at the feds own forecast. Now we go a little bit into the weeds. On the left side of your screen are the prior annual Unemployment Rate forecasts with the top Unemployment Rates with a top of 9. 6 . Were now at 5. 5 and you can see we run back to the long run rate this year according to the fed. Some time this year clearly we reach the Unemployment Rate threshold that the fed would have us believe in the right one. Not so true when you look at the next chart which is the inflation chart. This is where it gets confusing. On the left side of the screen is the current rates of inflation. The core at 1. 3 at year over year. And the headline at. 2 . Notice the target at the top of the screen is 2 . We do not get there in 2015. We dont get there in 16 or 17 but remember the feds metric is confidence were on the way there. So im going to just beg off right here and bring in Paul Mcculley. You have a question becky. I heard it described this morning as the battle on the fed between those with faith and those who want the numbers. Want to see it. Thats a great way to see it. The show me the money ones and the one who is say you know what . I have faith its going to happen. So paul are you an evangelical inflationist or show me the money inflationist . I think the fed can be patient in getting off of zero. I think they doed d. O. Need and want to get off zero. Were beyond that. Were now asking the question when does it have that confidence that it can raise the first rate hike in nine years . When does that happen . I think you want to see closer to 5 on the Unemployment Rate. And i think that was a huge event that they routed their estimate. And remember others have said they want to run it hot. You want to get through a period where you can see what inflation looks like after getting through the effect on these oil prices. Let me ask you a question. We were talking in the 6 00 hour about jones. About inequality and its gotten worse if you own assets youve done well. If you dont own assets you havent. Right. And joe raised the issue its the fed that created this and how much we should worry about it. Because assets have gone up. And the owners of the assets have done well. Getting out of liquidity trap with Monetary Policy alone is all about asset reflation which benefits those who have the assets. So theres no question of the disproportionate benefit of those who owns a s a seassets. The fed needs to let this economy run hot. We need to see increases and real wages. That is what running hot is. Its okay to go below 5 . But it is running hot going to exacerbate the problem he thinks is going to lead to a civil war . No. Not at all. The opposite. Where you would have its trickle down. Everybody gets to hear trickle down economics but it is. What spaulpaul is talking about is getting to a place where theyre getting wage gains. Think about what everyone else is going to be getting. A way to think of when paul says run hot, another to think about it is run tight. Which is the average worker has some leverage with his or her boss to say you know what . Either you give me a raise or im leaving. That has not been the case. And by the way, how far we are from that is really a fascinating question. A lot of people have dropped out at current salaries. What it takes to bring them back in is another question. Before we go quickly, on the way down on unemployment, the way the fed used to make hawks feel comfortable was like by saying when we get to 6. 5 wasnt it 6. 5 the number . That was the evans trigger. I thought it was going to be 6. 5 . Now weve got to 6. 6 6 and 5. 5 . Is it because inflation has been so quiet . Thats right. So be careful what you ask for. They keep changing the goal posts. They went out of style. You want to know an economist joke . An economist joke is nothing about inflation relates to. The fed saw the Unemployment Rate fall fall fall fall. Saw no inflation. So the nairu must be lower. It starts with nonaccelerating inflation rate of unemployment. It was not accelerating. Er ergo it is lower. Stop moving the goal posts. Observe reality. I am coming out of the leaves over here. Goodbye, steve. Thank you. Im leaving. Thank you. Nice to see you. See you tomorrow night when youre playing. You coming to my gig . I plan on it. Steve . No. No. Tomorrow night hes playing grateful dead. Which now that weve given half of it where is it . Stella blues band. By the way it wasnt magnums house. He lived in higgins house though. We showed images of the wrong house or the house magnum p. I. Had a ferrari. It might have beenbe higgs car too. It was. Magnum p. I. Was like the cato kalin kalin. This is worth than nairu . Hey hey hey. Lets talk about the dollar. Easily making up for its postfed losses. Parity with the euro seems like it could be a reality at this point. Mark mobius joined us earlier today to talk about the repercussions of a lower euro. The good side of this is the fact the euro is getting weaker. Miami in hong kong and people are lined up buying luxury goods because of the weak euro. Now lets go in with strategist at oppenheimer funds. He sees dollar parity within months. Everybody thought we put the brakes on this train. How do we get to parity . The fed was, indeed very dovish. And they really hit the dovish dials everywhere. Including referring indirectly to the dollar by saying exports growth has weakened. When that is the weakness were seeing isnt really worth mentioning. So you want it to send a signal about the dollar. How we get to parity is because in the current currency markets regime are really driven mostly by whats happening in europe and japan. The Monetary Policy actions, the experiments at the boj and the ecb are far more powerful than the exit strategy from the fed. So what i think the fed, what has changed in the last two days, its simply youre probably slowing down a bid at base. Because the fed is telling you if we need to revise our forecast every quarter to reflect whats happening to the dollar and oil prices and other things well push the hike a quarter further down. So if their forecasts are realized they want to do december. I think thats the game theyre playing. Its a chicken and egg game of how much dollar speed, and strength feeds into the fed and may slow down the pace. But the direction is set by the ecb. Paul you said earlier you do think were going to hit parity at some point. You didnt put a time frame. Does the time frame of six months sound legit to you . Were not that far away. Were talking five or six big figures from here. Its not that far away. Its 5 6 sort of move. I think were consolidating it now because the marketplace got too enthusiastic about the hawkish fed. And this is not a hawkish fed. This is a fed that wants to in the fullness of time get off of zero. So i think the marketplace is having to get back on size with where the fed is. I think your point is the existential point is thatthat the ecb will be at zero for the rest of our adult lifetime. For forever. Steve, against my better judgment im going to let you back in the conversation here. I dont mind taking it from them but from you lets do this anyway. If these guys are right, if we are talking about parity in the next six months how does that change the conversation at the feds perspective . Because all of a sudden youre talking about really probably getting a strong dollar. Pauls as good as a governor probably better because he can actually talk. But a shock works its way through the system and doesnt end up creating a year over year change every year. This is the way i see it. You get to parity and as paul said its only five dips away. Its not like its 251. In december when they met, the euro was 1. 24. They got back together in march and it was 1. 05 or 1. 06. Thats a big change. So this idea of confidence in the inflation outlook is one of seeing the shocks to the system work their way through. You were at 55 on oil. Now youre at 44. Most of our economists say the downside is 40. Much less to go. It works through the system and over time you dont have this declining inflation rate. What does that all mean . If were not as shocked anymore, what does that mean for the currency markets . Slower speeds. We remain in a longterm bull market. Thats the reality. The dollar cycles tend to last between 7 and 10 years. Thats been true since 1973. And we think that this move has been for the last year. But its not true. The dollar bottomed in the first to Second Quarter of 2011. Were actually four years into it. And so the magnitudes were there. The move could have another 10 move on a weighted basis. And youre just matching the previous cycles. Thank you for joining us. Steve, thank you. You were right. Higgy was the caretaker. No magnum was the caretaker. Higgy took care of the house with his two doberman for robin masters. And robin masters, voice, you never saw him but his voice was on twice a season. Like charlies angels. You know who was the voice . Orson welles. Really . Yeah. Very cool. Thank you. Okay. Were learning a lot today about a lot of subjects. When we return our neighbors to the north are crushing it in the cannabis industry. Jane wells of course had to find out why. Jane . Guys b i have been in a lot of grow houses. I have never had to wear a clean suit before. Up next how canada is doing cannabis better maybe, different, and why u. S. Investors are flocking north. When squawk box returns. S. 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. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. 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 . Welcome back to squawk box, everybody. The futures this morning have been incredibly strong. In fact, they continue to pick up. Right now those dow futures up by 157 points above fair value. Thats more than taking back the losses from yesterday. S p futures are up by about 14. 5 points. Nasdaq up by about 38 points. Cannabis business is growing in the u. S. But in canada they are already reaping big profits. Jane wells is in vancouver this morning to tell us why canada is mastering the pot biz. Good morning. Im actually in oh cannabis. This is a privately run grow which there are 4,000 medical marijuana patients in canada who can order online and pay by credit card. What is the value of everything in this room . Oh we can store up to 35 million of medical cannabis in here at any given time. Brendon kennedy of u. S. Based Privateer Holdings has raised from investors like peter thiel. He has put 30 million into this high security grow called tillray. Its one of 15 grows licensed by canada. He would never invest this in a marijuana grow in the United States. We like tight, tough regulations. But we also like clarity. And there just isnt the type of clarity that we see in canada. There isnt the type of clarity like that in the u. S. Now, federally licensed grows are relatively new in canada. And tillray expects to do 50 million next year. And because medical marijuana is legal on a federal level, they can do more research on the plant. In the United States theyre quite limited in the number of strains they can research. Theres also a fairly limited number of sites in the United States where they can carry out research. Tillray is planning to start Clinical Trials on Canadian Military veterans suffering from ptsd. One other difference guys no cash in this place. Because they have a bank. Which bank . Rbc. Back to you. Okay. Shane, we really wanted to hear you sing oh cannabis. She would. She will. Oh cannabis. Yeah. Thank you. She looks like shes going into surgery. What she will do for tv. Yeah. Thats a good gig though. Get leisman out there. Coming up the first day of spring has arrived but the northeast is about to get more snow. Perfect weather for some march madness though and some mad money. We check in with jim and find out if iowa state, whether that game hit his bracket like it hit mine. Ive only got three now possibilities for the final four. Well be right back. Share of kb home getting a boost. A strong start to the spring selling season. Down to the new york stock exchange. Jim cramer joins us now. As like a genius that it multitask, im sure youre getting ready for mad money but youre getting ready for the games yesterday. One thing, jim, in watching you know i scream the dogs are nervous in my house, everybodys up tight because im yelling about things. Two games, it was like i felt so good to have arizona and villanova. Its like i needed to relax, you know what i mean . Thank you, lafayette. Really because you just when i was coming out and doing this stuff, my stage manager, he said jim, baylor lost. And im like no. Dont ruin my day. Dont start with me. Jim, Georgia State scored last 13 points. Baylor was up by 12 Georgia State scored the last 13 points. Horrible things notre dame very first game i was watching they almost lost. Im scared about notre dame. I feel like they were a paper tiger. Ive got them to go all the way. Another one, i may be in very big trouble because i have the team that almost lost to harvard to go far. And everybody who went to iowa listen, all in iowa thanks for nothing. Iowa state. Yeah. I have iowa iowa state, northern iowa. Im like mr. Iowa. I feel like im all alone. I know. I had iowa state into the final four. That was my how do you do. I mean i just i mean i guess you know i just feel like that to have be so far behind right now with the only solace other people who went similarly to me. But still, last year at this time i was king this weekend. I know. King. Griffiths got 15 out of 16. What . Yeah. You got any comments on darden or whats happening . Darden levered to gasoline nike leavered to technology and gasoline, to some degree. Disposable income everywhere except at tiffany level because it done really you know you fill up it doesnt make you buy a diamond. Yeah. All right. More of the same today. You know that. Biogen. Every night i said buy biogen. Its up 40. Still buy biogen . I want you continue to buy biogen. I dont know joe. Ever seen the most easily game stocks keep winning for you . I my stock kentucky. Biogens kentucky. Stock brokers say, no one taking a profit. Youve got 16 , lets sell it. Sell kentucky in the elite eight line. Im going to hold it through. All right. I dont know. I dont know. Kentucky against the field, i might take the field. Well see. One of us will be right. When we come back this morning, many looks of paul macaulay, well ask if the beard is coming back in retirement. Stick around. Squawk box will be right back. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Okay. Theres wow, thats a cool look on the left there. Let get back to our guest host Paul Mcculley, former chief economist and manager director at pimco and former front man of iron maiden i think, right . No. Thats actually not true. Let me ask you, because i want things to run hot, too, becausize want things to start getting fixed, like what we talked about so we dont have a revolution. My question is given the welldocumented problems with in our workforce, parttime Participation Rate what would what would the rate be for it to be running hot . Four . What what would be running hot to cause wage increase . I like to know but i dont, but south of five. South of five . I think a four handle as we said. We dont get there often everybody do we . Did we get there during clinton or bush . We got there about a decade ago. But theres no impediment trying to get there because theres were below target on inflation. Right. So actually there is no reason that the fed shouldnt try and keep letting the Unemployment Rate go lower until you see literally increases in real wages. This is the deal you dont have to worry about it now youre below target. Maybe we need something other than Monetary Policy. Id like to have a good amount of fiscal expansion and actually Larry Summers is pretty can we repatriot and use for infrastructure . Its kind of hard to do that because you have money is functionable. Im not against the issue of changing the tax law so we can repatriate, but to say you can bring your money home and invest it into something domestically thats a really hard policy to do because it a company has a Good Opportunity in america, they will simply do it. Right. Thank you. Good to be here. Preacher man. Yes, he was. Thats how you get on the pulpit once in a while. Its good occasionally. Thank you, paul. Come back. That does it. Have a great weekend, everybody. Time for squawk on the street. Dont believe me just watch good friday morning. Welcome to squawk on the street im Carl Quintanilla with jim cramer at the new york stock exchange. David faber is off this week. Welcome to the first day of spring. Though we will have snow in the northeast stocks looking to build on a positive week overall. Premarket sharply higher. Earnings from nike darden tiffany, more. Oil around the mid 40s. Baker hughes rig