Transcripts For CNBC Squawk Box 20150501

About a lot of different things. Well bring you thoughts on the economy in a few minutes. Also well sit down with the berkshire managers and talk about their business now. We have the leaders of net jets our yennal tradingoriental trading and others. Its a busy morning but i know you have this mornings top headline. The top headline is your lighting. You look spectacular. Perfect. Can you get some tips from those guys there. Theyre just probably Walking Around setting up did you ask them how they do it. They spent all night setting up these beautiful lights. These are our guys and theyre going to come back with us. Shes glowing. Those are our guys. I think absence makes the heart grow founder and you guys miss me. Youre so nice and political. Your skin is radiating. Politically correct. Im not look. Thank you but look around. This is a big empty lots of people are going to be here and maybe it helps to be the only person on stage. Were jealous of your lighting. Back to this. You been drinking and smoking all night . You never get in the sun do you . Not a wink. Meantime becky im 100 but im healthy the top stories of the morning. Chevron topping the list of Companies Reporting Quarterly Results before the bell. Also on the calendar this morning clorox and msg. On the economic docket Consumer Sentiment and Construction Spending and april auto sales and tesla launching a line of batteries for the home. We talked about the potential for it yesterday. This is going to change the game. They made an announcement late last night. Elon musk said the problem with solar power is the sun doesnt shine at night so people need to store the energy. The issue with existing batteries is that they suck okay . Theyre really horrible. They look like that. Theyre expensive. Teslas new product will be rechargeable. 7 to 10 kilowatt per hour lithium ion battery with a price tag of 3,000 dollars. Delivery set to begin in three or four months. I wonder i think jim says you can buy tesla or panasonic. Because theyre the ones that provide this stuff to tesla. So the question is this is not a car product at all. Now hes in the battery business. Yeah. But do they manufacture the batteries themselves or at least initially they came from panasonic. Do you like them. Becky likes it. Before you move on to the next thing, guys im just looking at you from here you guys each sat in your own seats, nobody moved over because you look really far apart. We talked about that on monday. No, we are far apart on many things. Get closer. I dont want to get closer. We talked about it on monday. But on single shots its okay. Everybody wants their own computer set up. Not wanting to move but thats funny. Which manly man would take the girls chair if we were to do that. Who has to play beta male and move thats a good question. Youre in a standoff. Who would take the girly man seat. Were both in our manly seats and staying here. We are not uncomfortable close together but we dont feel we need to get close together. You cant reach other. You cant even touch hands can you. Touch hands. No. Touch hands. You cant touch hands. If theres purelle maybe. Can i finally get to my stocks to watch. Can you hear me . You can hear me in your ear right . I do. Are you trying to hold hands. Are you on linked in. I am . I wont do it. People ask all the time and i wont have to say no because im not on it. Why are you looking around . Circulate your resume around . Isnt that what it is . Business relationships and stuff. Yes. A lot of our squawk viewers have them. Thats fine. You should keep that. Just keep the account just in case this doesnt workout. Linked in shares are down sharply now. The company slashing its earnings forecast. Slower Revenue Growth and delay in recognizing the contribution of the Online Education company it agreed to buy for 1. 5 billion. Dow component visa kurn quarter forecast falling short of consensus. Its feeling pressure from lower crude prices and the strong dollar. Gilead earnings beat the street as the quarterly profit nearly doubled. And dreamworks reported a bigger than expected loss. The studio spending money on restructuring and diversifying its businesses and expedia shares got a boost after the Company Beat Expectations on an increase in travel bookings both inside and outside the u. S. Which if you think about it that covers everything except extraterrestrial i think. Inside and outside of the u. S. Theyre selling tickets for everything. Right. Now back to becky in omaha. Becky beck. Did you bring your hair person. Did i what . No my friend hilda is here an came with me this morning and angie has done my make up. Im all set. And you have the lightning. Got the lighting. Youre jealous. Well, this weekends meeting is all about Berkshire Hathaways businesses and we get a good snapshot of the overall economy here in the United States. They do have International Aspects too but when you really want to know whats happening you get to talk to warren buffet about what he thinks is happening in the economy. We asked him what he made of the latest gdp figures. They showed 0. 2 . It was bigger slow down than anybody was expecting and when you get numbers like that it has a lot of people starting to question whats going on in the First Quarter. You look over the last five years and its been lousy numbers. Over the last 25 years the First Quarter has been unreasonably slow and has people starting to question the veracity of those numbers. I think people are getting pretty optimistic three or four months ago and it isnt that strong but it isnt going backwards at all. Autos are strong and housing is a little better but behave been saying the same thing now for 5. 5 years and people talk about double dips and big compaqsones. But 2 a year with 1 inflation means that in a generation things improved 20 per capita. What happens with the fed when they see numbers like 0. 2 . Does that put the possibility of a rate hike on pause. I thought it was unlikely for that partially but much more because of whats going on in europe in terms of negative interest rates. It would be hard to bump rates up here. Thats been my view for some months. In fact you remember a few weeks ago we had jack welch join us and he thought it would be difficult and the fed could be crazy because of the stronger dollar. Warren buffet went on to echo the sentiments pointing out the very strong dollar now. If the feds were raising rates at the same time that europe was lowering rates that might lead to very see veer problematic issues if the dollar were to strength ben more. He said wait until europe gets its act together and i said that could take years. And he said yes. That brings us to the question of how long well be sitting with rates at zero. Not just in other places like europe but here too. Well going to have phil graham on today becky that wrote that piece about the golden goose and also theres a very interesting if you dont use the match what . Say that again. Audio is a little hazy its happening between the wall street journal and ben bernanke is saying another thing. Why are you trying to play hang man with the viewers. Tell us what the word is. Im not going to use the p word but its going back and forth between the two. Theres a battle going on. A potty battle. Theyre one upping each other. Cross swords. What are you doing . Anyway becky, youre following me. Its hopeless and thats the entire question is is it because of the fed or would we will much worse off if the fed hadnt done anything or are we going to be in this savings glut overcapacity, weak demand environment for another ten years . Its like unprecedented where we are right now but then people say its not just our country. Its also everywhere else but then people point out over there they have already moved to entitlement land, socialism land. So we have always been exceptional here. Now were in with the rest of the world because of a lot of of different issues. Joe one thing i will say is warren buffet we have been talking to him since 2007 before any of this even took place and he was the one that was saying that he completely admired what the fed was doing. Wanted them to step in like that and thought they saved the planet but in talking with him over the last year or so his tone has changed. Not that he looks back and thinks they shouldnt have done any of those things but he cant believe where we are. The unintended consequences of that, i think he gets nervous about what unintended consequences could be there and how this all plays out because weve never seen this happen before. Even the people in favor of every move they made are getting nervous about how long this can last and what the end as a result is. Well the journal says for what its worth, they thought the first round of qe was okay and necessary. But its been ever since then. Its funny because bernanke says youve been talking about you were wrong about forecasting inflation and thats the knee jerk reaction. The journal says thats not what we were saying all along. We were saying theres going to be dislocations when you mess around with prices you don know where you move out the risk curve i heard you sailors and youre putting people in the position to chase returns that shouldnt be in that position. Some day were going to know but yesterday when it looked raggel and apple and bio tech dont look that good youchlt dont know whats going to happen with all of this. We dont know for another two or three years i dont think. You let that out for a period of time. Youre looking at apple as your indicator. Its almost a defensive stock. Apple is all the way up to 790. And multiple of. Back down to 720. And yesterday it was i guess you as machine that used to invest money for people three Straight Days apple has been it hasnt been down three Straight Days since i think 8 months ago or something. Not only that it started going down the same day that everybody was perfect. It was the same day i was asking people. Are you sure youll see. Youre going to sell 58 billion worth of stuff every quarter. You just think you can check that off as done . These are huge numbers to try to keep up with. Huge numbers. So you can use your ten times earnings on current earnings but you see exxons earnings theyre down 50 from last year. But theres a reason why that is. Totally different. Okay. Well see. Stocks kicking off a muscles month of trading day. Futures this morning, well take a look after two ragged sessions yesterday. It was bad. Up 60 today and david joined us raising a red flag on stocks heading into may yesterday. This is a 5 to 10 dip that occurs in a matter of weeks or before the summer is through. Joining us is senior equity trat gist strategist at ubs wealth management. Its the dow component now and the most widely held stock around. Because mobile and apple are like different universes. Its exxon. Sorry exxon. Im not talking about oil versus technology. Im talking about its technology, its in the dow. Its the largest market cap. The most widely held. T. D. Ameritrade. You dont want to use that as a proxy. Its just one product though. It is. Its the poster child for this market right now. The nasdaq being back above 5,000. Technology being the place to go. Its the one most overly loved stock in the universe right now. If apple cracks watch the rest of the market. If youre over ten times you have a problem. So its just a given that the valuation is so low nothing can go wrong. No im just suggesting to compare it to exxon. Im not. You just did. Companies can have profits that seem like theyre set in stone and two years later they can be at 50 of what it was. We have a lovely very thoughtful smart guest on the set. Why dont we get his view. Im obviously a dope. Never invested money and never had a real job but anyway go ahead. You raise an interesting point about earnings but i think if you look at earnings more broadly though its not just apple thats reporting great earnings. Its broadly across the markets. Obviously the First Quarter was a little bit weaker. We are seeing a pause although i would say Earnings Results are coming in much better than certainly the most pessimistic. Hearing the analysis about exxon and what a great quarter it was, in the journal, this is the truth here. Exxon shell and conoco saw their earnings battled. It was better than expected. Theyll be down when oil prices were down as much as they were but if you look at the average company in the s p 500 Earnings Growth will be about 3 to 4 this quarter which is a slow down but you have the dollar. You the Energy Markets as well but if you look more broadly its a reasonably Good Environment for equities and for earnings in general. But you like it anyway don you . Sir. Dont you like stocks over in europe more than stocks here. Abroad. Yeah. You thought i was talking about a woman. I didnt know where you were going. Are you okay . Okay. Good. Done this before . Over in europe. Yes, in europe i do think that things look more attractive. Youve got essentially when we look at it earnings are the big driver of this marketplace and when earnings power in europe is much higher than where kurn earnings are. Earnings have recovered here in the United States. You still Like Technology Consumer Discretionary and transports . Yeah with tech you have relatively low valuations and we were talking about apple at reasonably attractive prices. What i think people have missed about the tech sec tofr and why if you think back a couple of years ago people were saying oh old tech it lost its mojo but what the problem was is that the cyclical environment wasnt good. And companies are spending a little bit more and as we go and the recovery broadens into european markets youll see u. S. Tech companies do better because of the better cyclical environment there in europe as well. And obviously they sell products. Huh would you get your clients to invest in europe. What would you . Would you buy individual stocks or ets . Depends on each client and what their needs are. Well not every client can just figure out how to invest in europe right . Yeah thats why we have Financial Advisors that our clients work with at ubs. Appreciate it. Thank you. Youre right next door. Were right next door. Coming up when we return its a busy weekend for net jets. Hundreds of the companys planes are headed for the kentucky derby. Theyre going to the big fight in vegas. Were going to talk to the companys ceo when we return but first heres a look back at this date in history. Y. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. Welcome back to squawk box everyone. Net jets will be busy this weekend. The fleet is in high demand to bring customers here in omaha in addition to kentucky for the derby and las vegas for the big flight. Jordan is the chairman and ceo. Thank you for being here today. Thank you. Good to see you again. Is this the biggest weekend of the year for you . No its thanksgiving. But this one is a big one. 170 flights in and out for each of the three events. Does that stress the capacity or is that no problem . Were ready for that. We perform big weekends and big days like that on a regular basis. We prepare long in advance. One of the things we wonder about how is how fuel prices are affecting the airlines. Its a little different for you because you have the fuel surcharge. Our owners pay the fuel. We just pass along the fuel price. The prices overall have come down but through the form of the surcharge. Upwards of 40 or 50 at times. I know that youre doing business all over the globe, your business in particular is probably a very good sign of whats happening in the stock market because if people are feeling flushed this is the type of thing theyll do and if not, they wont. Can you break down where we stand in the u. S. Europe and china now . Were on the cutting edge of the economic trends. United states has been strong for us for the last 18 to 24 months. Europe bubbled along. Theyre seeing improvement end of last year and beginning of this year. In china the campaign is slow but were knew there. Its hard for us to draw too firm a conclusion. I was reading a South China Morning Post story about how not just the Austerity Program but the severe crack down on any sort of graft that that slashed out the market for private jets something by 60 . Does that sown accurate . Thats right. The luxury market overall has dropped. Behave seen the private economy stay strong and we fly people in that segment but its dropped pretty significantly and we hope to see it come back. China is a longterm play. Well have to wait and see. Here in the United States been 18 to 24 months of strong and steady growth. You dont see anything showing up . We have not. We went through the same period last year with the same results. For our folks its often a longer term horizon than the quarter. We see several that might make a difference. Is it more tied to gdp or stock market. Its three factors. All three of those, of course which are often heading in the same direction play a role. Some pilots were protesting this weekend. Theyre concerned about health care but we did get the chance to talk to warren buffet about that last night. Heres what he had to say. The net jets pilots some of them will be protesting the meeting on saturday. What do you say to them . We have a Good Business and they have good jobs. They average about 145,000 dollars annually and theyre on for seven days and off for seven days. They like the work arrangements. They like the fact that they can ener the system at almost any place unlike with the airlines. We dont see our pilots going elsewhere but they have good jobs and we have a Good Business. Now buffet went on to say he doesnt expect to get involved in these negotiations at any point. Talks have been going on awhile though. Can you give us an update on where things stand . Sure, we operate on the rla which is designed to be slow. Its proven true in almost every case in the industry. We have been moving through the process. We have the greatest pilots in the world but we need a competitive and sustainable business. We want to be fair and competitive. I want to thank you for joining us jordan. Appreciate your time. Its great seeing you. Thank you. Like wise. Thank you. When we come back this morning coke is bringing back its share a coke campaign. Well be hearing from one of the Soda Companies biggest consumers and investors next. Find out about cokes executive pay package. And its a busy weekend in omaha. Warren buffet meeting with his berkshire faithfuls. Hes bringing charlie and bill gates. Stay tuned. Well be right back. Well be right back. Boys . Stop less. Go more. 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If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com excellent looking below the surface, researching a hunch. And making a decision you are type e. Time for a change of menu. Research and invest from any website. With e trades browser trading. E trade. Opportunity is everywhere. We will rock you anthem call 1800royal caribbean or your travel agent today on wednesday he appeared on stage at cokes annual meeting. In a light hearted moment they showed a video that included warren singing id like to buy the world a coke. Last night we got a chance to talk to him about the issue of executive pay at coke. That was a big issue last year when David Winters raised the issue. 20 of coke shareholders voted against the executive pay package. I asked warren how he voted. I voted for it and i understand and my understanding is that each of the top ten shareholders voted for it. And youre despite the fact that i recommended against it. So when you get 80 with iss recommending against it thats a pretty good vote. It has been interesting when they come out on this and what they have been recommending with different issues but buffet is firmly behind what cocacola has done and the changes they made in that executive pay and what it was too. A couple of good quarters. You look at that and thats one of the reasons right there. Youll talk to warren about ibm too. It will probably be on that a lot on monday too. We will. In fact well be talking a little later today with jenny from ibm too and well have that on monday for you too. He may be up now. We should have that handy. Is she coming out is she going to be out in omaha . She is. She is. Thats fantastic. 171. 171. Thats about break even. What his average price is. Maybe hes up a little bit and he still buys but he doesnt seem to be is he buying with both hands would you say becky . You know i dont know. Yesterday when we grabbed him it was in a parking lot and there were other media there so im sure it will be a question brought up tomorrow here at the annual Shareholders Meeting and we have him for three hours live on monday. Well get a chance to pull out as much as he can about what he thinks about that. The ceos of the Big Four Companies that berkshire owns massive stakes in will all be here. Theyre all here to celebrate the 50th anniversary this weekend. Ibm, American Express, wells fargo and cocacola. The ceos all of all those companies are going to be here. Were talking about what its like to be owned by Berkshire Hathaway. Thats monday morning as well. He still doesnt own a share of am does he . Not to my knowledge. He does have an ipad though. Yeah but you wonder about that too. If its just such a slam dunk. Yeah. I dont know. Anyway joe youre going to get to chance to talk to him about that on monday morning. He says he doesnt understand technology and thats his excuse but then he did buy ibm but that probably isnt technology anymore. He looked at that as having a competitive he looked at that as having a competitive mode and its a sticky product. The question is has it changed since the cloud came into play . Ill tell you andrew and i will be sitting here on stage tomorrow taking questions we have been getting through fair shareholders. A lot of the questions have to do with ibm and what he was thinking on that. But the other stuff is interesting too. Matt rose will be interesting today to talk to him. Anyway, one of the highlights of the journal today, a lot of the bets that were working didnt work in april. The dollar the bonds and even oil back to 60. So thank you. Coming up this mornings stocks to watch. Thank you, joe. And a lot of other stuff. Stay tuned. Much more still ahead on squawk box. X. 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 in just one day. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] [male announcer] if youve served in the military, certain habits may be hard to shake. For reintegration and adjustment issues big, small and everything in between, visit easter seals dixon center. Org. Jo nes. Zero, three, two, six. Here to make a deposit. [bell chime] ting welcome back. U. S. Equity futures are looking to rebound a little bit. They did stabilize yesterday. It was getting out of hand. At one point down over 200 points when i checked but managed to pair those losses to less than 200 and well get 70 back. Visa visa helping a little bit in the dow and the futures are the same as the implied open today since all the averages closed about where they were. Among the morning stocks to watch, fireeye. Raising its revenue forecast. The big driver government and business increasing spending to protect their networks but either way the stock is not responding. Its down about 1. 5 so far. Coming up when we return call it a woodstock for capitalists this weekend. An annual pilgrimage to hear from warren buffet. Well talk to three of the brands. Were coming back in a moment with all of that. Becky quick is in omaha this morning. S morning. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. If youre looking for a car that drives you. And takes the wheel right from your very hands. This isnt that car. The first and only car with direct adaptive steering. The 328 horsepower q50 from infiniti. About 40,000 people are expected to gather in omaha for the Berkshire Hathaway annual meeting. Shareholders will hear about how the companys businesses are performing but right now well get a sneak preview. Mike who is the ceo of benjamin moore. Sam taylor the ceo of our yenrinetal trading company. Thank you for being here today. I love coming to this meeting because berkshire has such a wide array of businesses and is a great way to figure out whats happening in the u. S. Economy. We can look at the gdp numbers with a drop off in the First Quarter but i like to hear it straight from you all on the front lines and know whats actually happening right now. I thought we could talk through the health of the consumer and health of the business as youre seeing it. You have a pretty good feel for whats happening in the Housing Market. Well were excited. Theres enough data where you could make a case for the consumers going down or consumers coming up but as we look at our numbers the most important one obviously along with gas prices going down which puts more money in their pocket Consumer Spending in march was as good as it was past november but the real one exciting is the household formations. In the First Quarter of this year there were 1. 5 million more households formed in the First Quarter and thats on top of q4 where there were 1,000,006 households. Its the first time that households get formed they need paint. Hopefully not wallpaper and thats good for our business. Do you see a direct correlation . Or do you see it first in your business and then see it reflected. It can go to household formation. It can be rental or new home ownership. Both need paint. The numbers actually helped benjamin moore, sales of existing homes havent come back as much as we would like. As new households form we see a direct correlation to that. My guess would be as people watch the values of their home rise too it makes them feel better about getting in and doing renovations. They do. You can look at the savings rate and theres two ways to look at savings rate. Its up to 5. 6 and people can say thats good or bad for the economy. For us we think that when people save and have more money, the first place theyre going to spend that is an important asset. That definitely comes into our world. I would guess that Discretionary Spending has to be pretty important so as gas prices dropped off if people are buying things from oriental trading, theyre not necessities but theyre things people want to do. We sell to consumers, we also sell to nonprofit organizations, schools and churches and businesses. If you look across top line growth has been challenging year to date. Strongest in businesses and followed by nonprofits and consumers. Really. For consumers we had a very strong easter season and that was good because easter was two weeks shorter this year. It came onslow and picked up at the end. Were seeing the same thing with graduation and we have a Vacation Bible School business. Theyre looking for value. We have guaranteed lowest prices and assortment. Did it surprise you that as gas prices dropped by 40 or 50 talking to people like the ceo of macys he said he was a little surprised that you hadnt seen consuming spending pick up more drastically. I would say the same thing. Its more challenging on our consumer side. Theyre using it for food and those types of things but we are seeing some strength you know some of the areas strong for us is our partys supply business is strong. Educational supplies. Birthday has been strong. So we have areas where we have seen the strength. Our focus is on bottom line growth. Top line has been challenging. We have done that throughout marketing. Gross margins have improved. So we are seeing very strong double digit growth on the bottom line. That has been the focus year to date. Why dont you tell us what you are seeing when it comes to how the consumer is feeling and a good idea of how new businesses are forming. We get an interesting vantage point. We are in over 50 cities across the u. S. And we have a location in london. I think it is fair to say that on a retail basis its been pretty flat for about a year and a half. On a rental basis we have had six quarters of growth. On the consumer side i think its primarily been in the lifestyle segment. For us that is higher end consumer. It is a millennial who perhaps hasnt moved into the Housing Market yet but is renting a nice apartment somewhere and wants to furnish it in a class a style. On a business side our Office Division Relocation Services business has been up for six quarters. With relocation being not what it was ten years ago here domestically why is that . I think you had businesses that were willing to purchase these homes in the past. And since the bubble burst in 2008 businesses dont buy these homes often anymore. That burden often falls on the relocatee. That does help us in some certain situations but also makes the pool the customer tool is a little smaller. We see some changes that happen after Something Like the Great Recession and then eventually the fatter expenses come back. Do you think this is a change for good . I think we are settling into the fact that while businesses may not be relocating as many people projects are up. And if projects are up those are temporary stays somewhere in the neighborhood of six months to two years and that tends to be pretty good for our business model. We talk about millennials and how much they have changed the industry. I think you all must be dealing with that. You mentioned that the idea that they are renting not just apartments but are ready to rent their furniture until they get into the market too. What do you have to do in terms of dealing with the millennials . I think it is the most exciting part of the future of the next ten years. There are 92 million millennials. I own two of them. I have two boys. They are both married. They got married later than i did. They rented longer than i did in my generation. And theres only 25 of that millennial generation are both married and in a Single Family home. So when the balance of that 92 million millennials come into the homeownership market we think that is going to be very good for our business. That is a tenyear horizon. How we are going to market. Traditionally we go to traditional catalog retailer. Millennials we are doing youtube ads. We are seeing our business as well as smart phone. The growth of the smart phone traffic. First quarter of smart phone traffic was up 60 . So it is changing the dynamics of the digital shopping experience. This is the one weekend out of the year where i think the berkshire Business Managers get to see each other. You were talking about how you had dinner last night with the board of directors and a lunch today. What do you learn at these meetings . What do you find out . Its a masters degree in education for me. Its just listening to the experiences of other people that have been here much longer in the berkshire satellite system than i. You learn from every conversation from every table and a wonderful conversation with our board of directors last night and a Panel Discussion that talked about all aspects of the culture really of Berkshire Hathaway and how important it is not only today but going into the future. It makes you proud to be a part of the process. It is a great opportunity if you have future issues too. You have a panel of 70 some highly educated very versatile people to call on. And that can make a difference sometimes. Jeff sam, mike i want to thank the three of you for joining us today. We will see you again later this weekend. When we come back another key company in the berkshire family. We will be talking trades with matt rose. Monday dont miss our interview with the ceos of big four investments, chief executives of cocacola, wells fargo, American Express and ibm together. It all starts monday morning. Dont go away. Much more ahead. Squawk box will be right back. Will be right back. A big lineup from the annual meeting in omaha. I like to keep the world to sing in perfect harmony well here from matt rose and buffett biaug raefr this hour. President obamas economic policies are killing the golden goose. Thats according to former senator phil graham. He will join us on set. And unveiling a battery for the home. The issue with existing batteries is that they suck. Details on teslas plan to change the way you power your home. Its may day. Thats the russian new year. The second hour of squawk box begins right now. Live from the heart of business new york city this is squawk box. Welcome back to squawk box here on cnbc first in Business World wide. Becky quick joins us from omaha, nebraska. First andrew has this mornings top stories. Tesla launching a line of batteries for homes, businesses and utilities allowing customers with solar panels to store the energy for use when the sun isnt shining. Phil lebeau will join us for more. When the sun isnt shining or where the sun doesnt shine . You need it to shine sometimes to power the batteries. Where the sun doesnt shine has a connotation that you dont want to when someone requests that you play something. This story will kind of i dont know if it will scare you but you know me and airplanes. Faa ordering operators of 787 dream liners to shut down the power periodically to prevent power loss. The power units could shut down generators if powered without interruption for 280 days. If you dont repower them problem emerges. A Software Update is expected to fix that. We will have phil on later. I dont want to jinx it when the last fatality in the u. S. Was. Lets not. But you have an idea of what kind of numbers we are talking about. So minuscule that winning the lottery more likely or a piece of sputnik still up there as you walk outside today could its because it is a binary when you hit an air pocket all the statistics kind of go out the window. The biggest is knowing when we hear that it is a minute and a half. That is the position you never want to be in. What is a minute . Like people know. Lets move on from that to bird flu. Deadly strain in five new sites in iowa. Morgan brennan is going to join us. More on that story. She is on the egg beat. Expert. Take a look at u. S. Equity futures after a really tough day in the markets yesterday. Things are looking up. Dow higher 65 points higher and s p 500 up about 5. 5 points. The euro breaking out of its slump posting strongest month in five years. Currency rose in april against the dollar. Figures. Right now lets get back out to becky in omaha. 112. Lets go back to 130 before june on the euro. What time do you arrive . Its just to make sure it messes with anybodys vacation plans going overseas this summer. Maybe i should have paid for some stuff now. You could have probably prepaid for the hotel. Maybe you should do that now . We dont know. Its like a forward contract. Sorry. There you are with that light. Its almost look like bern bernadette. It helps to be lit versus surrounding to be spot lighted. We are not jealous. I spoke to Warren Buffett last night. We got the chance to talk to him about a lot of things. We did speak to him specifically about the effect of the weak First Quarter gdp on the feds timing for the firstrate hike. I thought the rate hike was unlikely for that partially but much more even so because of what is going on in europe in terms of negative interest rates. I think it would be very hard for the fed to bump rates up here with negative rates in europe. I could be wrong on that. That has been my view now for some months. We also got the chance to speak to him about Burlington Northern santa fe. I asked him about the railroads progress. You look at the figures in the First Quarter in terms of velocity and earnings you will see a big, big change relative to the Union Pacific which is our yard stick. Its turned around faster than i thought it would. Joining me right now is matt rose, the executive chairman of bnsf. We saw the letter and what buffett had written and not too often that he highlights poor performances. What did you do to turn things around . What did you think when he put it in the letter . Actually, the situation goes back to 2013. It wasnt just 2014. We feel like we really made the change in the Fourth Quarter of 2014. It was about a year. We knew we had a different supply chain mix. The Energy Industry was really moving quite quickly and we were trying to put in capacity kind of like trying to overhaul an engine. A lot of challenges really crummy service year. We knew the investments we were putting in which were historic for 2014 5. 4 billion would get us where we need to be. We started seeing the green chutes of operating excellence and seeing the railroad get the rhythm back. We talk about the railroad being a momentum business. We saw that in the Fourth Quarter of 2014 and continued into 2015. The crude was a Huge Positive factor for you all in that it was creating extra shipments but could have been a part of the problem that it was embarrassment of riches. So if you go back to 2013 we handle half of the business of the entire Railroad Industry. We handled over 400,000 increase. We dont have a good way to say no we dont want your business when the ag rr all came and the consumer was coming back. It was a world class problem to have but still a great problem. I know you have put massive investments in infrastructure, 5. 4 billion last year and committed to spending 6 billion this year. You also have this happening at the same time that crude oil prices dropped dramatically. You have work arounds no matter what comes and how much is that they are not shipping as much crude oil . We have seen the decline in the next oil well being developed. We are handling a lot of crude. We will handle about 700,000 barrels a day which is really historic. This is our fifth Year Anniversary. If we go back five years we didnt have crude oil. So these investments we are making are historic in terms of size but they will be with the railroad forever. And whether it is ag exports or consumer mixes we know the railroad is bigger in ten years than it was this year and these investments will be there to handle that. You mention this is your fifth Year Anniversary of being owned by Berkshire Hathaway. What is different . The company is a lot bigger. When we look at our past five years prior to 2010 when we concluded transaction our revenues on an average basis are up about 30 on subsequent five years. Operating incomes up about 60 . These are big numbers. We were already the largest part of Berkshire Hathaway. It has been great being a part of berkshire we need to make changes to the Capital Program warren is flexible. We are able to apply the capital to the problem and grow into the capital. You are in the role of chairman now, not ceo. You are somebody always known as incredible details guy. You would know if the train arrived on time in los angeles for ups. You would know every detail down the line. Are you still just as much of a details guy when you are in chairman position . 2013 and 2014 were a hard year for transition. Financial results were alltime record. Customer we disappointed. It is hard to pull out of the detail. I know a lot of the numbers. But carl is leading the company now. Carl helped me run the company for 15 years and now im helping him. There is plenty for both of us to do. We have a lot of policy issues that we continue to work through, states local communities as well as federal government. I spent a lot of time on that stuff. We are a great team together. Speaking of the federal regulations there are new rail car rules expected as early as today. It looks like they are very likely going to be asking for these new cars to be brought on in the next five years. They are asking for something with a braking system that is an automatic braking system that the industry has been pushing back against. What do you think about that . It is a 300page rule so we will take time to digest it. Basically what we believe is that we do need a stronger tank car. We applaud the administration for their leadership on that. But we also have a mature Railroad Industry from a car fleet. What concerns us is taking one subsection of a fleet of a couple million rail cars and making a different braking algorithm that has potential to impact capacity. Part of the way the rule is going to be hinged is if you dont do this you have a blanket slower speed across the entire network. When we go back and look at this really tough recession eight years now, nine years, we are starting to approach historic volumes that we as an industry saw in 2006. We have to go back to 2006. It was a period of time where ports were congested, railroads congested, highways congested. We see ton miles back up on the various infrastructures. Anything that anybody does that has potential to take away capacity has potential to have a major impact to the economy. We just saw that this last really highlighted the last three or four months at the ports on the west coast when there was a dock worker strike. We saw how fragile the supply chain was and chaos that it created where people literally werent getting goods for months on months. Capacity is not abundant. Even though we are spinning our way into it last thing we want is a regulation that automatically takes away capacity. We will work with the administration and will be very vocal in terms of how it will impact the other 95 of the customers that need to use the railroad network. I know that Burlington Northern has been in front of trying to get some of these newer cars to be transporting things like crude oil. You also had the second derailment in 15 months about two months ago in illinois. It raises concerns for communities along the lines where the crude oil is being transported. How do ayo make sure they feel confident and safe even if it takes longer than five years to implement these things . We are all in on what we call next generation tank car. The illinois derailment, if you live in that community you are concerned. Part of the challenge the administration has had when they go through omb and do this cost benefit analysis is that the costs are relatively certain. This is going to be about a 3 billion rule. The problem is the railroads are so safe that the benefit of trying to avoid the next derailment is very hard to contemplate. At the end of the day two months ago we just celebrated our one millionth load of crude oil that we hauled. And we had 40 times where we had a rail car be destroyed. Its world class performance. So we get it. We understand communities. They are concerned. We haul lots of stuff that we need for the economy. People need chlorine for Water Supplies ammonia for the farm. We as a country have seen such an improvement in terms of our domestic crude availability. There will always be issues out there. We know we can continue to haul this stuff in a safer manner. By transitioning to the tank car to be retrofitted as well as next generation tank car we believe that is the answer that we need. Matt i want to thank you very much for your time today. It has been a pleasure speaking with you. You bet. Thank you. Joe and andrew back to you guys in the studio. Thank you, becky. Coming up tesla announcing a battery for the home making solar energy a more Viable Energy source. And then buffett biaug raefr to talk about the shareholder meeting. Former senator phil graham is here says president s economic policies are killing the golden goose. N goose. Financial noise financial noise financial noise you used to sleep like a champ. Then boom. What happened . Stress, fun, bad habits kids, now what . Lets build a new, smarter bed using the dualair chambers to sense your movement, heartbeat, breathing. Introducing the sleep number bed with sleepiqtm technology. It tracks your sleep and tells you how to adjust for a good, better and an awesome night. The difference . Try adjusting up or down. Youll know cuz sleep iq™ tells you. Only at a sleep number store where youll find the best buy rated mattress with sleepiq technology. Know better sleep with sleep number. A battery system for the home. Phil lebeau joins us with more. Its a new business for tesla called tesla energy. What is tesla energy . Last night in california it was unveiled. It is a suite of products the company will be offering a series of battery systems, if you will. These will be built for the Home Business and utilities. Those are the options out there. Three different systems for three different markets. They are taking orders now and building these in california at least initially and then deliveries starting in three to four months. Explaining the need for a backup power system in this country. The issue with existing batteries is that they suck. They are really horrible. They look like that mpt. They are expensive. He goes on to say throughout the evening that this is an inefficient system. Here is the Consumer Option called the tesla power wall. Price 3,500. If you were to have it installed. You are basically looking at roughly 350 per kilowatt hour. It will power homes during outages. Musk explaining how big this move could be for changing the Energy Equation in this country. Its like a product of tesla. We are making this really big product that doesnt happen to move but it is really big. And thats what we are doing is version one. We are building that right now. There will need to be many factories in the future. What he said there is perhaps most interesting thing is there will need to be many giga factories in the future. When it is completed in 2017 will have the capacity by 2020 to crank out a half million lithium ion battery packs every year. The estimate is that about a fourth to a third of that production will go towards tesla energy, towards the power wall and all of these home battery units. Its an interesting move that they are making here just for some perspective. A lot of people have asked me how many people have solar panels at home and might be interested in this system . About 600,000 homes in the u. S. Have solan panels. Thats at least the Addressable Market right now. That market is going to grow. Does it only work if you have the solar . It sounded like a backup system. That is our understanding. You have to have the solar. That is our understanding. And they are not going to sell the solar panels. 600,000 doesnt how many households there are . Must be 200 million plus. I just had that. Addressable market is huge. 600,000 is a drop in the market compared to how many homes are out there. We talked about this at length. You put the panels up. You charge this baby up fully and then how long could it run a house . Like a generator . I believe ten hours of complete if you need a backup power supply you will get about ten hours out of that. That will get better and better. These generators are amazing. Even if the grid is down for 18 days or something it will run on natural gas, hooked up but you cant be totally off the grid. You could be off the grid if they can get this to where it was a twoweek charge. You can get it charged up with solar and then you can just be off the grid. But ten hours, they got to get better. Thats complete. We are not talking about the question is do you need complete power . You need like refrigerator lights. But still it will get better and better. The cost is going to come down. Last time we had a fatality. It wasnt that long. I understand what you are saying. That was in San Francisco where they were too short on the run way. I forgot. Thats right. That was horrible. Before that its just im trying to remember when we had, god forbid. Was it in new york . Buffalo you had a commuter jet. That was a commuter one. Not to minimize it. If you really want to go into when was the full fledged fatality it was shortly after 9 11 you had twa crash in new york. That was the last major airliner disaster here in the United States. Thats over ten years. Yeah. Its over ten years. We have had a long stretch of safety in commercial airlines. Whenever i bring it up people say dont talk about it. Youre jinxing it. This is a tribute to the airlines and faa. You remember when we were growing up phil it was just seemed like almost every year big jets. I remember the one, the collision in mid air over california remember down south of l. A. Stuff we remember as kids that were frightening. It seems really safe which is great. Did you see, phil that the faa would not sign off on the pilot in 2010 . Its a very small we have already forgotten about it and dont talk about it much anymore. In 2010 they said no way we are signing off on you. We see the history with some problems you have had and it is not going to happen here. When you think about that guy saying we absolutely did pretty amazing. Anyway thanks, phil. Airlines and cars for us and now batteries. All in one. Its almost like a renaissance. Coming up a deadly outbreak of bird flu. More than 5 million chickens can be effected. Those details just ahead. E details just ahead. Time now for todays trivia question. What is the most followed brand on twitter . The answer when squawk box continues. Continues. 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 in just one day. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] now the answer to todays aflac trivia question. What is the most followed brand on twitter . The answer youtube with 49 million followers. Coming up next shes a titan of financial journalism and all things Warren Buffett. Carol loomis will join becky after a quick break. Monday dont miss beckys interviews of berkshires big four investments. They will be together in a rare and far reaching interview all starts monday at 6 00 eastern time. Ern time. When a moment spontaneously turns romantic why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. 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Linked in is slashing its forecast warning it will be a delay in recognizing benefits from the Online Education company that it agreed to buy for 1. 5 billion. American express cannot retaliate against merchants that steer customers towards cards that charge fees. A federal judge making that ruling yesterday. I dont know if we can count on this but an average home uses five kilowatts per hour and a ten kilowatt battery from tesla would last two hours fully charged to run the entire home. Im seeing other things about how much the price per kilowatt hour would be. I have to check to see if the numbers are right. This is the first introduction of this thing. Up to 20 or 30. You need to have the solar thing. I thought you didnt have to have solar. What would you save . You save it off the grid. You charge it up and just have it. And have it there ready to go when things go wrong. It is like a generator. You can have that hooked up with natural gas. If you cant get natural gas that is one way of having it. I dont know if you pay 3,500 for that. How much is a generator . I sort of im the maker, not the payer. Lets talk about bird flu found in five new sites in iowa. Morgan brennan joins us now with more on that story. Good morning. Initial tests are coming back positive for five more farms bringing the total number of cases in iowa up to 17 and all within the past two weeks. Rembrandt owns one of the farms in question which houses hens. If the usda confirms this this will be the single biggest case since the outbreak and brings the total number of chickens and turkeys to over 20 million. That would make this the biggest bird flu outbreak in u. S. History. Iowa Officials Say the state lost a quarter of the population worrisome since iowa is the top producer. We are getting this after officials reported a broiler chicken breeding farm. Chickens raised for meat was infected. It is about 19,000 birds marking the first time this flu has hit this type of operation. And broiler chickens are the biggest part of the market. If you see more reproductive herds like that one impacted that could cause serious supply shortages. This bird flu keeps escalating. Who is the analyst who came on and said not to worry, its not a big deal and now it has turned out to be a big deal. Its not a big deal for consumers but could become a big deal when you realize the operations had bio security measures in place and coming down with the flu. She said it was the Buffalo Wild Wings lady. Is it she said its not in friers yet. It hasnt been. Thats what makes the smaller operation 19,000 bird farm in iowa notable is the first time we are starting to see that part of the market effected. The majority of those types of birds are raised in the south in places like arkansas georgia, alabama. So we havent seen the flu hit that part of the country. Right now to the extent that we are seeing it here in the middle of the country and the northern part of the country, but if you start to see that impacted thats really going to have a huge, huge impact on the poultry market and exports. Stories like this work best when the reporter is right there and you can hear the clucking and stuff like this. I dont know if you got are you hinting i should take another trip out to the boonies . If it gets worse or we dont want to do the green screen. Thats probably not a good idea. You would have to go. It would be a lot easier to do it that way. Ill tell you, my go bag is packed. If they want to send me out there im ready. Dont make longterm plans. Dont leave town. We are going to get back to becky who is out of town in omaha this morning. Andrew thank you very much. As we mentioned Berkshire Hathaway meeting kicks off this weekend. Joining us is carol loomis. She literally wrote the book on Warren Buffett and the long time editor of his letter to shareholders. I want to read you something that the editor and chief of fortune had to say about her. He said she is the longest tenured employee in fortunes history and she is arguably the greatest business journalist of our lifetime. That makes her kind of like cal ripken jr. Combined with michael jordan. He was over the top, dont you think . I dont think that actually. It hasnt been long since you retired. What do you think about retirement . I have been so busy that i dont understand how i worked outside the house. I have done a couple of speeches and one with tim geithner. I did an interview with tim geithner. He lives where i live. The annual report takes quite a while. Im not sure warren realizes this. It takes quite a while. I do that. The annual report is now 38 years that you have been editing this annual report. This one was a doozie. He really went all out this time around. He really did. What did you think about this report . I thought it really was terrific. I thought the aesthetics of the whole thing. I really that thought that he put his heart into it. Of course, he had charlie. It was very different. It is very different. This time was really a blueprint of the last 50 years and looking ahead at the next 50 years. Exactly. What jumped out at you the most . What surprised you . I was amused and surprised when he said that berkshire is a sprawling conglomerate trying to sprawl farther. That was a big statement just to put out there and to really set the stage for what followed in the annual report. I was surprised at the words about Burlington Northern because he doesnt usually have that kind of thing in there. Criticism . It was more criticism than i had really remembered in the annual report. He is critical of himself often. He doesnt reach out to be that critical. And he was pretty strong in the section about private equity and other buyers. He was talking to people who lead companies who might want to join berkshire. Im sure there are people out there who really noticed. One of the things that jumped out to me was in charlies writing where he basically said either of them would be a better ceo than warren is. And that had so many people kind of jumping ahead thinking this has to be the horse race at this point between these two. What was your take away . I thought it was unusual for charlie to say that and certainly that puts them in the mix for who they might select. I always say warren isnt going to quit. So ten years from now i dont use that just loosely, ten years from now it could be entirely different people who would be in the mix. So i dont see this man quitting. You have been good friends with him and met him 49 years ago. He has been doing this 50 years. It was 67. You are looking at 48 years. You followed most of the entire ride watching berkshire grow along the way. What have been the biggest take aways of how warren and charlie have come up with the growth and how they have managed to keep getting bigger and bigger and bigger . I think first of all it is warrens mind. He really is brilliant. I think he doesnt get enough credit for how smart he is. He has also been very flexible and he has learned. He has learned all of his life. He couldnt have imagined that berkshire would turn out like it has turned out. When he changed in the 80s and began buying the things he bought i did a big story about him in the 80s. It was the first thing i wrote about him. He had the seven. It was the furniture mart, scott. I said what are you going to do when you get 12 . Are you going to have the terrific 12 or whatever . He just changed. Who could have imagined back then that he would buy auto dealers . That one really took me back when i found out about it last year. I think he has been really flexible. Carol, you have written all kinds of stories where you take down ceos who have been behaving badly where you look at scandals things like accounting scandals and earnings inflation. I just wonder looking at business since you stepped down from day to day work at fortune is there anything you wished you could expose explain, write about, things that happened in the Business World over the last year . Im sure there are. I havent been thinking about it from that standpoint. So im not going to be able to come up with anything. If you get fired up about anything will you let us know . We need you to continue watching this. Thank you very much for joining us today. It has been a pleasure. We send it back to you. Coming up former senator phil gramm will join us next. As we head to break take a look at u. S. Equity futures. U. S. Equity futures. Boys . Stop less. Go more. The passat tdi clean diesel with up to 814 hwy miles per tank. Just one reason volkswagen is the 1 selling diesel car brand in america. Well, sir. After some serious consideration id like to put in my 15year notice. Youre quitting . Technically retiring, sir. With a little help from my state farm agent i plan to retire in 15 years. Wow youre totally blindsiding me here. Whos gonna manage your accounts . This is a devastating blow i was not prepared for. Well, im gonna finish packing my things. 15 years will really sneak up on you. Jennifer with do your exit interview and adam made you a cake. Red velvet. Oh, thank you. I made this. Take charge of your retirement. Talk to a state farm agent today. Our next guest contends that bad policies under the Obama Administration has led to under performing economy. Joining us to tell us how to save the golden goose, former u. S. Senator phil gramm. There has been a day where we havent talked about both sides of the argument. I know you are well aware of it. There is one side like you that talks about the tax changes in the code talk about regulation talk about sort of just the private sector not getting a lot of love. That is one side. The other side says the depth of the Global Financial crisis has caused demand that the world seems to be in overcapacity of everything. How do we know which it is . First of all, i think the thing we all agree on is that this recovery is extraordinary disappointing. If you compare it to the ten previous recessions in post war america we have created about 12. 1 million fewer jobs than we would had the recovery occurred at the basic strength of the average of the other ten. Per capita gdp is 6,100 below for every man, woman and child in america what we would have expected from the recoveries in post war america. Now, why is that the case . Well at first the administration recession was deeper. In fact, deeper recessions in post war america had meant stronger recoveries not weaker recoveries. The reagan recovery from recession roughly the same depth was the strongest recovery in post war era. Caused by different things. Everything is different. The question is what overall things do we know . Here are the things i think we know. There have been tremendous amounts of research by economists on the performance of our individual states and the performance of Different Countries at different times. And what we know basically is other things being the same the lower the marginal tax rate is the more Economic Growth states and countries have the more flexible labor markets are, the better economies perform, the more private Decision Making dominates the Capital Market the better performance is. If Regulatory Burden is limited by the rule of law the economy tends to perform better. So the argument i make in my golden goose article is basically that if you take things that economists generally agree on that effect growth and then you go back and look at what has happened to them during this administration in each and every area i think if you just looked at the numbers and you didnt say this is america and we are talking about the Obama Program i think your economists would pretty well agree the economy is less competitive today than it was six years ago. You know the people that even acknowledge that the 80s and 90s had higher growth and seem to be better employment figures they say those were zombie ideas that came to roost and caused the recession and trickled down. These growth ideas trickle down. And now with income inequality they say they didnt trickle down and we are in this position because of failed policies. I was there and i was the author of his budget in the house. That is how they frame it now. They frame it because they are trying to make a political argument. The problem is it has no factual basis. When reagan came into office inflation rates were double digit. Interest rates were up 21 . Economy was staggering. And reagan changed everything by changing policy. You look right now, american corporations are more profitable than they had been in decades. Better than the 80s or the 90s. Strict profit margin. If regulations are too harsh and obama is doing the wrong things how do you square that . What are they doing with the money that they are earning . Unfortunately, they are not putting it back into the economy. Exactly. Why arent they . You would think they wouldnt be as successful as they have been. I agree we are not growing as fast as we want to. Interest rates are zero. When you look at the value of stock its discounted present value of future returns. When you are discounting at zero those returns look terrific. The point im not talking just about the stock market but the performance of the companies. But what is missing is a confidence in the future that induces people to invest. If that was the case you would think the marthket would be lower than it is today. No. Because again market values are set by other things as well. Interest rates being high on the list. Why is General Electric getting out of the finance business . I am going to grant you this. I have always agreed basically with what you are saying. My question now is has the country moved left . We are seeing Hillary Clinton pushing to be further left. If she does win there comes a point demographically where a republican doesnt get elected nationally again. Are we past the point of no return in being european stock . You think exceptionalism can come back . I think we are going to anybody who thinks she is going to change if anybody thinks she is going to change policy i think is wrong. I think the pressure she is ahead of the polls. What will the country look like four years from now . I think it will look pretty much like it does now. What has really happened i think is when i went to congress a long time ago, the distribution of Public Opinion looked like a nice normal curve. Now the modes are moving apart. When you get to the primaries they look like that. So i think she will be pushed to the left. Well see what happens. I dont know what to think. Depends on who you are talking about when you are talking about the public. When things are bad you change. Thank you. Coming up when we return a longtime berkshire shareholder. Mario gabelli joining becky at the top of the hour live. Top of the hour live. 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 . Flo hey, big guy. I heard you lost a close one today. Look, jamie, maybe we werent the lowest rate this time. But when you show people their progressive direct rate and our competitors rates you cant win them all. The important part is, you helped them save. Thanks, flo. Okay, lets go get you an ice cream cone, champ. With sprinkles . Sprinkles are for winners. I understand. Still to come this morning, squawk market master Mario Gabelli will be here talking about buying opportunities at the top of the hour. Monday dont miss Warren Buffett live on squawk box for three hours. We will be joined live by charlie monger and bill gates all at 6 00 a. M. Eastern time. Much more squawk box still ahead. Ahead. Theres some facts about seaworld wed like you to know. We dont collect killer whales from the wild. And havent for 35 years. With the hightest standard of animal care in the world, our whales are healthy. Theyre thriving. I wouldnt work here if they werent. And Government Research shows they live just as long as whales in the wild. Caring for these whales, we have a great responsibility to get that right. And we take it very seriously. Because we love them. And we know you love them too. Ideas come into this world ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary and messy and fragile. But under the proper care, they become something beautiful. Inside the businesses of Berkshire Hathaway. In this hour Mario Gabelli on the future of berkshire plus his bet on the big race. Chairman and ceo of Nebraska Furniture Mart on expansion of the lone star state. Is apple bes the place to be for investors . The restaurant chains makeover helping to a profit. We talk pancakes, burgers and stock prices with the companys ceo. And being dubbed the flight of the century. Mayweather and pacquiao this weekend. We go inside the ring and inside the numbers as the final hour of squawk box begins right now. X begins 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 World wide. Becky quick is in omaha this morning getting ready for the Berkshire Hathaway annual Shareholders Meeting this afternoon and this weekend. You will hear from her and berkshire shareholder Mario Gabelli. We are less than 90 minutes away from the opening bell on wall street. I cant i have a small on my face because im getting hammered on twitter. I was showing my liberal bias again. How can i overcome that . Is there a way . I saw a different tweet so im not sure. Depends where they come from. So your guys im like a fascist. Pretty much. And then with my guys i am showing my liberal thats what he was talking about with the camel. It used to be like this. But there was the center and then an equal amount. And now its everyone has gone their own way. We have headlines to bring you. Tesla launching a line of batteries for homes. Elon musk making an announcement about it. The issue with existing batteries is that they suck. They are really horrible. They look like that mpt. They are expensive. Teslas new product with a price tag around 3,000. Delivery set to begin three to four months from now. I think someone may have tweeted you it is only going to last two hours. In the meantime Research Firm ihs reports that the apple watch costs less than 84 to make giving the device the lowest ratio of hardware cost to Retail Prices across any apple margin. I would have thought there was actually very little margin on that. Then you have to throw in there is rnd in this too. Simple analysis doesnt work too well. Also linked in shares down sharply. That company slashing full year earnings forecast. Slower Revenue Growth at hiring business and a delay in recognizing the contribution of the Online Education company that agreed to buy it. We will send it back to omaha where becky quick is. Thank you. As we have been telling you all morning long Berkshire Hathaways meeting brings tens of thousands of shareholders to omaha this weekend. Warren buffett and others addressing Business Conditions in the markets. Joining us is chairman and ceo Mario Gabelli. Its great to have you here. Always fun to be here. You join us every year when we are here for this. You have been coming for how long . Lets assume about 15 years which is only 30 of the 50 annual meetings. We have our own Institutional Research meeting where we visit with lindsay. This year we have Union Railroad and then in addition to that we have a couple of other Companies Like td ameritrade. In addition to tonight on behalf of Columbia Business School hosting 500 of our closest friends. Thats terrific. We have done that for the last eight or nine years. It is a coming home week. And a lot of friends from around the world. Why do you think 40 dozen people come here to hear what warren and charlie have to say tomorrow . I would say that is an element of it. When you look around the room and listen to how they watch the movie in the morning, the flick that they put together and the questions and watching them in the hall its either they own the stock or they like the idea of Value Investing or they believe with the way warren does with the vision of america and future of america. As much as we have lumps and bumps, those are challenges. We know at this point we are looking at berkshire shares watching what has happened to the stock. I know you have been watching it very closely, too. What do you think about the levels here . The stock book value at the end of last year was 146,000. We think it is 160,000 this year. At the end of next year probably 175,000. Warren said he has the equivalent of bernanke put buying it at 120 of price. He will only buy it and keep margin of safety. We calculate the value of the business if we can sell it financially, engineer it probably 240,000 area per share. So the stock has had a big move in the last 18 months. It is pausing. You look back over the last 30 40 years and we started buying. We owned it at like 2,000 cost. Its 50 to 100 times your money. We are looking at brka sth stock that mario bought here. We probably made 50 or 60 times. It is in our asset fund. During that period and go back to march of 2000 if you read the Berkshire Hathaway annual report people were saying he is old school just before the market collapsed and he had to put a note in it saying call me if you want to sell your stock to us. You only made five or six times your money but it has been a steady attractive progress. What do you think about the market overall. There are a lot of concerns about whether the feds stuck at this point, whether we go into a slowing economy after gdp numbers and the enn the fed is in a position where if they raise rates they put damage on the industry. You have the dots and dynamics. Clearly oil and the dollar have been an element in terms of companies and Earnings Releases that we are talking about. The pluses are coming out more slowly. Looking at the economy is one thing. Looking at the market is a second thing. I think the economy is steady. We need infrastructure built. We cant get a highway bill through. New york city has more pot holes than we have ever seen. Tell me about it. It is awful. The bridges, infrastructure bill is fundamental. Its where we should put capital. A highway bill in addition to that as the economy continues to grow as we look into 2016 the elements like the euro at 109, 110, 111, the big decline even if it is down another 10 . I am looking at the economy picking up. The American Companies doing better because of earnings in europe coming into the u. S. Financials will kick in. So the market is a function of earnings. We are pretty comfortable with that. X the obvious dynamics. We are comfortable with the notion that multiple not being degraded by interest rates. On balance there is no margin of safety. If something goes wrong you have the volatility. The next crash will occur, but that is terrific. That is what market is all about. We are investors and not traders. So you would be looking at any opportunities as a time to jump in . In the last three or four days Companies Like twitter, stratus down. We set up the analyst gathers data and we help interpret it. If the market allows the stock to drop 30 you have to take a look. Well talk more about the specifics but i think andrew has a question in the studio. You are our media cable gurue. I dont know if i talked to you since the Time Warner Cable comcast deal fell apart and the unbundling conversation. I want your perspective on what you think will happen now to Time Warner Cable and more broadly in the media space . If i were Brian Roberts at comcast i would take my intellectual knowledge and understanding how to deliver broad band to a consumer. At the moment i would take a pause in the United States and maybe find clustering opportunities but i would want to go global. Take your knowledge and talent. We are looking at who they would want to own outside of the United States. In the United States the obvious dynamics. You have Time Warner Cable with 70 billion market cap. Charter, comcast. These are enterprise values. Clearly the notion of clustering, consolidation, scale and tax efficiency are driving. I would like to see me personally speaking for my church and ownership for my clients, cablevision has 3 million subscribers. Lets figure out a way to cluster that spin it off and thats terrific for the shareholders of Time Warner Cable and perhaps cluster l. A. And some other markets and then obviously i would watch the team figure out what to do with charter. Ill take that as an answer. Part b was the other one and that is the classic fight with fios. And verizon with regards to bundling unbundling. Tomorrow night you have a great event in boxing somebody wants to see it they will pay to listen and they will pay to watch the boxing. Something else tomorrow night, the derby. And thats i forget what time . 6 30. Those are the dynamics. If you have marginal programming as we talked before its a challenge. Quality content still good. Distribution still good. We want to own both. Mario, one of the things yo asaid that you are kind of on the look for at this point, one of the things you are looking out for is what berkshire will go hunting for next. Were you surprised by his move into the auto dealerships . At the timing was late in the cycle. On the other side the u. S. Is selling 17 million cars. 14 million of them are retail. Most cars have either traded or some component where they have to have financing. That financing market gives you a spread. Berkshire is going to make a lot of money on that spread. 85 billion flow. If it costs them zero. They make money creating the flow. So if i were looking at consolidating the auto dealerships my sense is im going to hold this number. 16,000 Car Dealerships in the United States. Its still fragmented. He just got in. They call him the car man now. On balance its not a big what he should do. What warren should do is buy auto nation. Sdpl i thought most manufacturers kept limits on how big you could become. Last time i looked warren has been terrific. Taking care of general motors. We got mercedes teed up. He can rent an italian like me to talk to sergio. There is grand scheming. You got to connect dots. Will you stick with us for a couple minutes. We are going to take a quick break. Andrew, i know we have a lot more when we come back. We will get you and Mario Gabelli back in a moment. Before we get predictions on what will happen we head to Churchill Downs. Dominic chu is there. You will not believe the amount of bourbon sold this weekend. We have the ceo of ihop joining us. We are already eating pancakes on the set here. Then we head back to omaha and hear from the ceo of Nebraska Furniture Mart. Furniture mart. G for a car that drives you. And takes the wheel right from your very hands. This isnt that car. 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Its the biggest day for horse racing and the biggest day for kentucky bourbon, as well. Nearly 7,800 liters will be sold. Dominic chu is there to take a sample. We have to talk who you like at the end. Youre sober now, though right . Reporter i am sober stone cold. It is a little early in the morning for me. The bourbon being served here is a drop in the bucket compared to the american whiskey business. Sales rose by 10 to 2. 7 billion. With regard to Churchill Downs and where we are right now that 7,800 liters will turn into about 120,000 of these guys here the 10 mint julep the staple for everybody drinking here much like if you went to fenway park you get a 10 bud that is what this is going to be here. 120,000 of those. A rarefied group of people will have a mint julep in a commemorative glass about 1,000. If you can imagine a rarer group than that only ten rare mint juleps here sold for 2,500 a piece in a commemorative glass. About 25,000 worth of sales. Those proceeds go to a horse charity. If you look at the overall picture a lot of stuff happening with regard to history. Horse is a big part of the picture, as well. Remember, just wait. Later on today we are here at Churchill Downs. We are going to have the ceo of Churchill Downs. It is a publicly traded Company Coming up later. That interview on the halftime report. I know you guys are eating pancakes. Whats the weather like tomorrow . Its going to be its supposed to be clear, dry, about 72 74 degrees. Perfect conditions if you want to come out here with your hats have a mint julep. Who are you . Do you have a pick . You know, Everyone Wants far pharoah. Its fight weekend. I know jane wells is out in vegas. I put money on its a knockout. It seems like a perfect story line. We are going to talk to mario about it. Maybe you want to listen. You may need to put a bet down for me. Ill message you. Am i allowed to do that . Message me if mario wants a bet. Gambling across state lines. Something mightp happen there. Your marker is good with me. It shouldnt be. If it doesnt come in you are going to have to handle that. So mario, you know i immediately thought you would be interested in this because of your love of all things animals and pet supplies and all of that. Spelled it wrong. 7. 5 million horses. Starts at noon. Coverage on nbc on sports network. 6 34 is post time. It is always fun to watch. Do you know that four of the horses are undefeated this year and have records, 19 races and won 17, four of them. Do you have a pick . Me personally no. I think bourbon is on the way as well as Churchill Downs bourbon. You dont need to worry about woodford reserves. Thats all we are going to talk about the derby and you dont have a pick so i dont know why they told me to ask you that . Because he owns Churchill Downs. The reason is that we are the largest owner for clients for a long period of time and have been benefitting from acquisition from big fish which is an online way to participate in the gaming world. And that is what is driving the stock. Obviously at this time of year everybody is thinking about the company and thinking about how to participate. Its 120 with 17 million shares. Its a small caps company but kind of has a great brand and great global following. We were down there one year or i was at least. It is an amazing spectacle, obviously. And my old kentucky home thats a great part of the day. It should be fun. Supposedly one of the closest five or six horses that can win. There are good picks like in a knockout the same day as the fight. That might be or its a knockout. That might be a good pick. Dont miss the running which we just talked about, the 141st running of the kentucky derby. We will have early coverage on Nbc Sports Network and then it moves to the mothership. Nbc at 4 00. And then post time is 6 34. And then we will know whether we have a shot at triple crown after 37 years. 37 years without one. You have never seen one. I have never been there in person. You have never seen a triple crown in your lifetime . This is true. Coming up more from becky in omaha. She is bringing us more guests in just a moment. It is time for breakfast. Ihop making fresh pancakes this morning. The mothership reporting better than expected earnings. We will hear from the ceo in just a bit. Just a bit. Thank you for being a sailor, and my daddy. Thank you mom, for protecting my future. Thank you for being my hero and my dad. Military families are thankful for many things. The legacy of usaa Auto Insurance could be one of them. Our worldclass service earned usaa the top spot in a study of the most recommended Large Companies in america. If youre current or former military or their family, see if youre eligible to get an Auto Insurance quote. Coming up First Quarter profit. First lets get ready to rumble in the fight of the century. Jane wells is in the ring. You got tickets . No. I did not, but you know here is the thing. Tickets are starting to come down. Just managed to get myself up here right now. Here is the sign of what is happening here in this town. We are going to talk about it after the break. Prices are so high and starting to come down. We will have actual numbers for you when we come back. U when we come back. Welcome back to squawk box. Fiat chrysler reporting 5. 8 increase in sales below estimates of 7. 5 increase. Other auto makers report later this morning. We have a busy morning of Economic Data ahead. And the u. S. And canada join safety regulations on shipping crude oil by rail following series of accidents of trains carrying crude. A show down between floyd money mayweather and Manny Pacquiao going down. Expected to shatter pay per view records. Jane wells joins us from vegas to break down the staggering numbers. Are you totally opposed to being the lady that comes after every round and holds up what round it is . Im not but the audience is totally opposed. Would you do it . Of course i would do it. I would get booed and people would throw eggs at me. I have never been afraid of that. They will have to weigh in later this afternoon. The anticipation is amazing. I want to show you what is happening. My room here last night was 85. Tonight early this week if i tried to book it for tonight or tomorrow night it would be 1,500. Now some of the rooms have come down to 480. Only six times more instead of 18 times more. Highest asking price is 350 grand. Stub hub says highest selling price is 21 grand. News about sponsorships Manny Pacquiao has most of the sponsor money. He added samsung which is capturing behind the scenes this week on its devices. Manny is putting together somewhere in the vicinity of 5. 6 million on sponsorships. He has six sponsors on his apparel. Floyd, has taken a different approach and has one sponsor which is draft kings. Even though hotel rates are coming down they are three or four times normal. At motel six they will leave the light on for you tonight for 230. Here is what steve wynn said about it. Room rates are 1,500 for typical rooms and you cant get a room in this town. I have never seen anything like it. Even when haggler fought leonard. Now even if you stay at the wynn you cant see the fight on tv. There is a change here. Earlier we were told parties are sold out. Here in the ball room you can get a ticket to watch the fight on tv tomorrow night for 400. But the drinks are free. Back to you. Okay jane. Did you pick a horse . I know you are doing that. I just found one that did you . You look for names. There is one, its a knockout in the 20th spot. Far right. Thats a tough spot. You dont usually want the horse in the 20th spot. The name i like. Its a 30 to 1. Far right. I didnt see that. I cant believe it. What do you think . Thats a good idea. I just found that one. It is a pretty good idea. I want to know if that horse was named its a knockout three months ago . Is this a newly renamed horse to take advantage of the fight. That is too much of a coincidence. It is a coincidence. This weekend he will be answering to the name its a knockout. Change it to its a knockout. They dont have far left on here. I would like to make a joke about that but i will leave it at that. Well said. Well leave it there. Joe, berkshires nebraska furniture market is looking to take advantage of the weekends annual meeting and make sales. Over 100,000 shoppers are expected. The events traffic and salestypically double black friday sales. The chairman and ceo of Nebraska Furniture Mart. You went to the last mayweather fight. It was an unbelievable fight. My son and i and warren went and had a great time. Tickets were not quite as hard to get as this event but still pretty tough. It was great. It was an unusual and fantastic experience. Lets talk about what this weekend means for Nebraska Furniture Mart. There are going to be people piling in here. As an extra sweetener to these shareholders arriving you offer discounts at the mart this weekend. They range depending on the category, but the customers get a fantastic deal across all Broad Spectrum of goods. Its exciting for us. Its like black friday week times two. In fact on tuesday we had the biggest day in our history which is when we start the meeting. Can you give numbers or sales . Our previous record was 8. 2 million and we did over 9 million on tuesday. So that tells you a little bit about how many people are going to be coming here this weekend. Could be a barn burner. You have just opened up a new property. There is a Nebraska Furniture Mart in dallas. Lets listen to a few of the statistics. It has nine football fields worth of inventory. It costs 400 million to build, 560,000 square feet of space. The warehouse has 1. 3 million square feet the size of 22 football fields and 4,800 parking spaces. Why in the world did you build something this big . Our store is built on unbelievable selection giving the customer great values. Furniture, flooring appliances and electronics. Over the years it has evolved into several buildings. We had a chance to paint the picture in terms of what the customer would like in the shopping experience. It is a dream come true and we are so excited about it. I know they like everything big in texas. How has the opening gone so far . We soft open starting march 4. We will start official grand opening next week. It has gone fantastic. With virtually no advertising it already paced to be our biggest store. We know that its still early days and in early days for Something Like this what are some of the bumps along the way . Thats the reason and the purpose of the soft opening is to work through the issues that we can make sure we are delivering a world class experience. Some bumps are execution on the operation side the delivery side making sure we get customers taken care of and making sure they understand how to get around. Overall, compared to what we did the last time when we opened kansas city this is much smoother and better. We are working every day to make sure we can deliver a great experience for the customer. This weekend aside and the circus atmosphere of this weekend aside, how do you think the consumer is feeling right now . We know that they are feeling a little flusher from having paid about half the price for gasoline at the pump. That doesnt seem to always be translating to retail sales. What do you think . That is exactly right. Our business is better than it was and it continues to improve but its no barn burner. Its just steady along. Its just popping along, continuing to improve. We are not setting the world on fire. Why do you think that is . I think people are not confident in everything that is going on. Its inconsistency. Listen to the news and one day it is better and one day its not. They dont have the confidence that says im going to go consistently grow spending and consumer goods. I know this is an incredibly busy weekend for you so we will let you get to it. Thank you for joining us. Thank you very much. We will send it back over to you. When we return a squawk breakfast meeting. We have i hop pancakes heading to the set. We will talk about the comeback of fast casual dining right after the break. After the break. Ried. Never. Psssssh. Guaranteed. You picked a beautiful ring. Thank you. Were never having kids. Mmmmmm. Breathe. I love it here. We are never moving to the suburbs. We are never getting one of those minivan . We are never having another kid. Im pregnant. I am never letting go. For all the nevers in life state farm is there. 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. Americans are dining out a little bit more maybe it is gas prices. Din account dine equity is reaping the award. The Parent Company on the top and bottom lines. Casual dining is back on track after the restaurants slide. Its different running a chain these days julia. I think in the past maybe people werent quite as aware of ingredients and calories and health and everything else. So its kind of a new era. It is a new era. But certainly one that we are prepared for and we are very excited about the future. Things are going very well for us. Couldnt be happier. Even at both applebees and i hop there are some moves to make things maybe a little more fewer calories more millennials based. I know i hop has waffles. I like the other stuff. I think anything in moderation. You have to respond to changes in society. Sure. I think we have been doing that for a while. I think we are doing a better job of communicating that to the public about whether its a low calorie item or fewer carbs. I think thats what we are focused on but there is always going to be a part of the menu that is for people who want that every day indulgence. It is all about getting something for everybody. I would think with ihop that i might say if i were the franchise, if i owned one the people that come in the door they are at i hop for a reason. Im not sure i want to give them a kale salad. Give them what they are coming for. You will always get the large majority of people who want either pancakes or fabulous egg dishes. There is a small percentage that want that small calories alternatives. We have it for them. Everybody wins. Applebees has to constantly be updated. With the millennials one way is to put ipads at the tables. Is that working . Is it done . We are in the process of putting the pay at the table tablets in everyone of the applebees restaurants. It is really what the consumer wants. They dont like the idea of the credit card leaving the table. So a lot of technology that we are testing and installing is really all about how to make it better for the consumer. What makes it easier for the consumer. That is what we are finding is success successful. I appreciate the payment issue at the table. Do they like the process of choosing their meal effectively at the table electronicically as opposed to talking to a waiter or waitress . Some do, some dont. Its a work in progress. I think its not about trying to make less labor. Its all about doing what is best for the consumer. We have a percentage of people who actually dont want to use the tablet. And we are obviously testing other items. Is that generational thing or just people have different tastes . Do you think we will see this more broadly in other restaurant chains . I dont know if it is generational. I have seen young and old who want to use it and young and old who dont. I think all of the technology that we are looking at whether mobile app or online ordering it is about making it more convenient for the consumer, helping the consumer. We will continue to do what is necessary to help them make the best choice and obviously have them come more often to an i hop or applebees. The article that said things were looking up for casual dining implied that maybe the gas prices and the consumer was finally feeling comfortable enough to spend some dining out. Have you seen that in the last couple of months . For us both at i hop and applebees we have had fabulous sales results. For us it is all about differentiating the brands and doing everything we can to stand out. I think the economy continues to be a little lumpy and bumpy. I have been saying that for probably a couple years. I do think what the consumer wants most is price value and brands that are differentiated and that is our focus. I can remember i think it was ihp and i remember did i hop buy apple bees and change the name to dine equity . I hop purchased applebees in 2007 and changed the name on New York Stock Exchange to dine equity and listed as din on New York Stock Exchange. Big weekend. Thank you for the pancakes. Im eating a lot of them. You are so welcome. I hope you enjoy. I ate a quarter. Im doing the whole thing. Love to eat on tv. They are not taking you right now. When we return jim cramer from the New York Stock Exchange joins us to wrap up the week. Monday we will break down the Berkshire Hathaway annual meeting. Becky will be joined by Warren Buffett and microsoft chairman bill gates. Squawk box starts at 6 00 a. M. Starts at 6 00 a. M. 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 . Earnings from dow component chevron. As exxonmobil did yesterday, chevron beat by a wide margin on the top and bottom lines. Helped by 580 million benefit from currency fluctuations First Quarter. Its easy to say that. They lost money in their u. S. Upstream operations. Lost 460 million. They were able to earn 1. 37 but erb earned 236 a year ago. They are going to deliberately try to cut costs. For the year, forecast was for 3. 85 is what the street is looking for, they earned 10 last year. Nice to say they beat expectations, but earning less than a half last year. At the New York Stock Exchange jim cramer joins us. Do you play around with the derby. You love numbers and stuff like that. Im having trouble. Should i pick far right just for the name . No seize the day, carpe diem. I took a handicap in horses. Garden state was beautiful. I was going to do carpe diem. Big browns son. Did not finish. At the breeders cup, my horse is still running. I think youll agree with me to win the triple crown, you have to win the kentucky derby. So well know whether there is a possible triple crown after the derby. Yes. Thats like when chevron reports it could be good. What i meant was if this is pharaoh, if pharaoh is a great horse you have to win the first one to have a chance. That makes all the sense in the world. Thank you. Its going to be pacquiao or mayweather. Thats another one of my profound comments today. Unless its a draw. You are just you know what . Im on fire. Jameis is going to go first. You like the jets pick . Yes. How did you know . The jets picked real good. Are we tossing back to becky. Becky was cute she was talking about how warren was able to go to last years one of the big fights last year but the tickets are much harder to come by this year. I was saying that to irv not to warren. I thought the rhodes interview was fabulous. Thank you, jim. Honestly they had real problems. He said customers were disappointed. It was great to hear someone say, yeah, we disappointed the customers. I felt like i got a real understanding of the economy. Great interview. Its a knockout. The horse formerly known as prince someone wrote in. Somebody told me a horse was named three years ago when it was foal. My apologies. Thanks jim. See you in a few. Coming up the Worlds Largest curve tv. Berkshires big four investments. Coke wells fargo, American Express and ibm. It all starts monday. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print Amazing Things right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. Ihs reports the apple watch costs less than 84 to make. That gives the device the lowest ratio of hardware cost to retail price across any apple product. Linkeden is slashing its full year earnings forecast. It warns there will be a delay recognizing benefits from the Online Education company it agreed to buy for about 1. 5 billion. American express cannot retaliate against merchants that steer customers towards cards that charge lower fees. A federal judge is making that or made that ruling yesterday. This morning the Worlds Largest curve tv will be on display this weekend at the Nebraska Furniture Mart in omaha samsungs tv is 105 inches and retails for 120,000. This weekend only special pricing from Berkshire Hathaway shareholders. Can you bring one back to your house . I might need help with that. Join us on monday. We do have a big show planned for you. We have three hours with Warren Buffett. He will be joined live by Charlie Munger and bill gates. We have the chief executives of wells fargo, coke American Express. Ill see you tomorrow. Im taking materiality because cramers got carpe2k r are carpe diem. Im taking carpe diem. Squawk on the street begins right now. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer. David faber is off today. Social names continue to got clobbered. Plenty of earnings after what has been a very busy week. Oil, the best performing commodity in april up 25 which is giving some back today