Transcripts For CNBC Squawk Box 20160406

Up by over half a percentage point. Lets tell you about the top three stories that were focused on this morning. They all about regulation. The top one, pfizer and allergan will be mutually terminating that 160 billion transaction following the new inversion rule changes. Sources tell cnbc that pfizer will pay allergan a 400 million breakup fee as per that tieup agreement. Both companies believe the treasury overstep the bounds of its Regulatory Authority. Sources say neither drug maker wanted to risk launching litigation against the government. President obama weighing in on the Treasury Departments new steps to stop corporate inversions. Ive been pushing for years to eliminate some of the injustices in our tax system, so im very pleased that the Treasury Department has taken new action to prevent more corporations from taking advantage of one of the most insidious tax loopholes out there and fleeing the country just to get out of paying their taxes. The president called on congress to eliminate tax loopholes that favor large corporations. In other deal news, the Justice Department is preparing to file an antitrust lawsuit to block to proposed merger between halliburton and baker hughes. Thats according to a number of reports. The deal would combine two of the worlds lthree leading oil servicers. And brokers will be forced to put clients best interests first when it comes to fees and investment choices. Labor secretary thomas perez is going to join us at 8 30 eastern time to explain how the rule will affect savers and brokers. Theres been a lot of debate about that rule change. Im not sure customers appreciated that the rule did not exist before. A lot of multinationals are not happy now. Thats true too. Because they cant do normal stuff, normal loans in this country are going to be affected. Once again, just like no analysis of the unintended consequences of doing a thing just to block pfizer. Lets talk about something happier. In sports news, the university of connecticut Womens Basketball team wrote history tuesday night by winning an unprecedented fourth Consecutive National championship in a game that was never in doubt. The huskies beat the orange by 31 points to cap off a perfect season. The uconn women have now won 75 consecutive games. The coach has now won 11 titles, which is more than any coach in mens or Womens Basketball. Right. But what came this is a pretty easy one. What team won seven Straight National titles . John wooden and the bruins. Ucla 1967 to 1973. Bill walton, et cetera. Thats before i was born. Right. And youre reading off a screen, no less. Its not like you knew it in your head. I knew it was the bruins. I was alive then, andrew. I was in high school. But ucla went undefeated a record four times. Thats impressive. I forget how many total they won. Some ridiculous number. Anybody in sports knows the most dominant team, probably either the bruins or yankees. Why did i bring it up . Unc. It probably is the yankees. Mot not this year. In political news, results are in from the wisconsin primary. Probably going to hear something about duke. John harwood yoins us now with the numbers and the fresh delegate count. Is that your analysis, john, that is the most dominant college team . Wouldnt you say ucla for that stretch . Reporter absolutely. A couple points about it. One, were talking about mens sports. The uconn women are dominant. I just dont know if there are strings of dominance like that in other sports. But in terms of mens college athletics, yes. John wooden won ten championships, seven in a row. Just an amazing performance. Thats sick. All right. Reporter shall we transition to the john wooden of the 2016 president ial campaign . Bernie almost is. Reporter there isnt one. Six out of seven. Reporter we saw last night, joe, something weve been waiting for, which is both donald trump and Hillary Clinton to get beat and beaten soundly in large states. So in wisconsin, you had donald trump losing by 14 points to ted cruz. Ted cruz really consolidating that antitrump vote, won solidly. Didnt win all the delegates but won the overwhelming majority of the delegates. On the democratic side, you had Hillary Clinton winning significantly into a majority. It was about 5346, i believe. That was a substantial victory for sanders. Not a huge delegate haul, given the democratic rules for how they allocate delegates. The question coming out of wisconsin is how much does either of these change the race. It is not necessarily obvious that ted cruzs victory over donald trump transforms the republican race. Does it make it harder for donald trump to get to 1237 . Yes, it does. The number of delegates he needs. But until ted cruz shows that he can beat donald trump on more favorable turf for trump and theres a lot of favorable turf coming up, like new york in two weeks, were not going to know if hes going to be able to deny donald trump that firstballot nomination. As for Bernie Sanders, very unlikely, given the democratic proportional delegate rules that he can catch Hillary Clinton 37 this is likely strengthening a protest campaign. But what about one that hurts her chances in the general . If this is a situation with Younger Voters drawn to him, if those voters are angry. Reporter i think you cant rule out that possibility, depending on how well the democrats can pull together after the nomination. We did see in 2008 very bitter race between barack obama and Hillary Clinton. That went on for a long time, into june. Hillary clinton was winning races at the end. You know, in a similar fashion to what were seeing in the races right now, the front runner was losing significant states. That didnt end up hurting barack obama. But that doesnt mean this could not hurt Hillary Clinton. Hillary clinton clearly has vul ner vulnerabilities. Heres my question, john. Lets say its open convention for republicans. Lets say trump is ten ahead of cruz or Something Like that. So trump is number one, but nowhere near the number he needs. Then you have cruz. Then you have kasich way at the bottom. Is it possible if trump had more they could suddenly decide on cruz even though he had less . And number two, if they didnt pick trump or cruz, would they go to kasich just because he hung in there, or would they go to paul ryan . Just say, look, if were going to go to someone thats so far down, you didnt really win it, won one state or something, would they really go to one of the three that stayed in, or with the push for paul ryan, would they go to paul ryan . I still think kasich i dont know how you arrive at kasich. I kind of agree with your analysis. If its not trump or cruz, and i think a strong likelihood is it will be one of those people, but if its not going to be one of those two, i would think that republican delegates would be more likely to make the jump to the fresh face that carl rove has been talking about lately, and thats likely to be paul ryan. Ryan says i wont take it and we had the back and forth. I talked to him about this a couple weeks ago. He first said, i hadnt thought about that and who knows whats going to happen. Later he was stronger in saying, no, no, its going to be one of the people running. I think if you get to a jump ball deal where delegatings are flee to do whatever they want and Party Leaders can try to steer that result, i would think that a ryan candidacy would hold more appeal than a john kasich one. I would assume whoever gets put up loses at that point, just by default. Why would you want to let yourself be that straw man . Reporter why would paul ryan want to do that . Yeah. Reporter because its ever politicians dream to get nominated for president without having to run. And you think hillary is this dominating candidate. I think if you get to the point where youre putting up somebody who wasnt enon the ballot, it means the whole thing is so broken. Its gotten weirder and weirder. Reporter but andrew, the way Party Leaders would look at it is paul ryan could fix a lot of things in a hurry. This is somebody whos been vetted, who ran as a Vice President ial nominee four years ago who is very popular within his party. He has a great presentation. Hes got a great personality. People like him. If it does happen, hes just getting ahead of the game preemptively to bolster hillary. Are the gloves off though . Cl clinton said last night cruz is just a trojan horse. Reporter becky r you saying the gloves were on before . Well, at least it seemed to me there were time where is it looked like they were working together. Trump going into the rnc last week. At this point, no more illusions or pretending. Reporter i think everything is contingent on results. Donald trumps demeanor and behavior. If he goes into new york and finds hes losing, youre going to see a different donald trump than if he lives up to these we got to go. 3540 says theyre going to bolt if its not trump. The question is, would the republican nominee absolutely need all of them to be totally energized, to show up, or would just getting half of them that said, okay, ill go for paul ryan and independents. So you wonder whether they could get enough of those trump people that are disenfranchised to actually show up and vote for whoever they put up if its not trump. I think paul ryan, hed probably get enough of them to beat a weak democratic candidate in Hillary Clinton. We dont know whether shes going to be i saw the other day she was at a restaurant and comey was they said, heres your server for today. Reporter did somebody write that joke for you . No, it was in the post. It was a cartoon. All right, harwood. Thank you. We have two more experts here. These guys walk the walk. Former United States senate jedd greg, who was a senator and a governor. Then former new mexico governor bill richardson, whos also done so many things. Were you good at all of them, bill, or just couldnt find your niche . U. N. Chief, all this. I think you were good at all of them, right . Well, yeah, but i couldnt hold a job, so i kept changing every two, three years. Right. But i tried for the big one. I didnt do too well, but thanks for having me as an expert on the president ial race. I lasted through two primaries, but thank you. I dont know what to call you. Anyway, im going to call you senator, jedd greg. Ill call you governor, bill richardson. So are you now back in the Clinton Family full on . Are you totally back with them . Or are they still mad from the barack obama thing . Are you back in there totally . Well, yeah, im supporting her, although i was seven years in the wood shed. But im out of it. Im supporting her. I think shes by far the best candidate, foreign policy, domestic policy, family. You mean just among democrats . Between her and bernie . Yes, im totally for her. I think shes going to be a fine president. I think shes going to win too. You do . Okay. So senator, weve been back and forth. Do you think its different than last time we spoke when it was almost how do you say it, andrew . Fate acomply. I dont think were anywhere close to that this time. Last time when we finished our conversation, i mentioned i thought paul ryan was the dark horse. I just heard you have a great discussion with john on that point. This is clooerly not resolved. It appears to me its going to go to convention thats open. I dont see how trump gets to the number before the convention. Hes going to have the most delegates. If hes within 100, hell probably be nominated at the convention. You wont help prepredict what would happen . If its not trump or cruz, how do they get to kasich . Wouldnt you just go to paul ryan at that point . If youre going to elect someone, paul ryan is only behind kasich in delegates like ten. Because thats all kasich has. 143. Kasich is its legitimate that kasich is staying in because this thing is not resolved. You cant win the presidency as a republican unless you can carry ohio. He has a tremendous track record as budget chairman and as governor of ohio. Is that your guy . Almost as strong a record as bill richardson. Hes a quality guy. I think as long as he stays in, hes going to have enough delegates. Remember, you also have the rubio delegates who are undecided right now or uncommitted. Theyre like 175 delegates. So this is a very wild west situation. Its amazing. So judd, who would you prefer . Maybe you dont want to say, but do you think that the trump base, which is pretty significant, do you think theyd be so disenfranchised that they wouldnt support or turn out for either ryan or whomever or kasich . Well, two things to say there. First, you got it right. I think a large percentage of those people may be frustrated now. Some of them wont vote. If they do vote, theyre not going to vote for hillary. Theyll vote for the republican, i suspect. Secondly, the most interesting number that came out of wisconsin, 30 of the republican vote in the primary said they would not vote for trump in the general. 30 said they would not vote for cruz in the general. You cannot be elected president if you cant maintain the base, and those numbers are pretty staggering. If either of them are nominated, they have a very hard road, even against an extraordinarily weak candidate. I wouldnt be surprised if the Democratic Party didnt get thrown into some disarray here and saw joe biden come out of the back room because of the fact the Party Decides that hillary just is too weak after being beaten by sanders everywhere shes going right now. And he won the bracket. The white house bracket for the final four, biden. Yeah. All right. I wanted to turn to a political topic. I want to talk about inversions on the front page of the paper today. Here you see washington having a real impact in the business world. Pfizer dropping the allergan takeover. Guys, politically, how does this play . Governor, i assume youre with the president on this. Senator, i assume youre on the other side. Frankly, senator, in this environment, given everything thats going on, i assume its semi tough to actually go out there on a platform that says, you know what, were okay with our companies leaving the country. What the white house did and what the treasury did yesterday was pure demagoguery converted into practical action, which is going to have a significant negative impact on this economy. We have the highest Corporate Tax rates in the world. We have 2 trillion sitting overseas the companies cant get back here to invest because we have an administration that wants to have a high tax rate so they can take the money and spend it rather than having the Companies Invest it either through dividends or through expanding their companies here in the United States. This administration is the most taxhappy administration weve ever had in the history of the country. Our tax rates are reflecting that, and its affecting our competitiveness as a nation internationally, and its affecting our Economic Growth here in the United States. Governor . Well, look, im pro free trade. Im concerned about the antifree trade posture voters on both sides. But i think the economic issues, the issues of income inequality, low wages, theyre going to dominate this president ial race. This is why i think that Hillary Clinton has a new program to help small businesses. Shes got initiatives that give corporations credits for hiring workers. I think on the economic issue, shes on the right side. And i agree with the president. I do think that there are a lot of loopholes. Although like judd, i am profree trade. Im for the asian agreement. Im for nafta. Why cant you guys get together on lowering Corporate Tax . Both sides claim they want to lower the Corporate Tax. You both claim you want to do that. When i was governor of new mexico, we lowered the personal income tax, Capital Gains. I think it spurred Economic Growth. Judd has a good record there too when he was governor. Look, we need tax reform in this country. Whos holding up the train then . Well, both sides are. But what we need to address more is this lower wages, income inquality that sanders has tapped into that, trump has tapped into. I just wanted to Say Something on the democratic race. I dont want to diminish sanders victory, but Hillary Clinton, shes 250 delegates ahead. Shes got 2. 5 million more votes than sanders. Wisconsin is a great state, but 83 of the voters there, theyre white. The clinton base, minority voters, union voters. Its not as strong in wisconsin as it will be in new york, as it will be in california. I think that shes going to win the race, and im a little concerned about the tone that sanders has been taking lately. Hes been positive so far, but lately his people talking about flipping delegates, maybe not supporting her if she wins the nomination. Shes been a total statesman. So im a little worried about the tone. Polarized on all sides. Gentlemen, great to see you this morning. We always appreciate your perspective. Thank you. Coming up when we return, the minutes from the latest fed meeting released at 2 00 p. M. Traders will be watching the balance between hawks and doves on Interest Rates. Were going to talk Market Strategy after the break. Then legendary blues traveler frontman john popper is here to talk music, politics, and his new tellall memoir. Squawk box returns in a moment. 32 years at this place and now ive got 9 days left before retirement. Weve been planning for this for a long time and well keep evolving things. So dont worry. Knowing you is how edward jones makes sense of investing. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to squawk box. The rallys engine appears to be stalling. For the first time in about a month, the dow posting a tripledictatorshtriple tripledigit loss. Joining us now is Karen Cavanaugh at voya investment, and here on the set is chris russler. Good morning to both of you. Explain this. So everybody thinks over the next week or two or three were going to hear terrible earnings. Thats why the market seems to be doing what its doing. And yet, you read the front page here of the money and investing section, and the headline is why risky assets look like a better bet. What are you supposed to do . I think you need to do research and get out and know your companies. First and foremost, the number one principle of investing is Good Management teams. I think thats what you have to look for. We are in the period right now of negative preannouncements. We are seeing a few of them. Thats not a surprise. I dont think the First Quarter was great. But were in a slow growth economy. I think that thats, you know, moving companies along. Were positive on stocks over the long term, but were coming into a period of the year where volumes begin to dry up. Its the summer. If im sitting on cash, am i waiting this season out . If i have a lot in the market, should i be pulling back as i wait this out . Or should i be jumping all in . We view cash as strategic. When you get into the earnings season, you look for those dislocations of Great Companies with Good Management teams. Thats when you invest. You can put your money in there for the long term. Thats the opportunity. Im going to ask you for a couple surprises in a second. Karen, what do you think is about to happen in the next couple weeks here . Lets face it, earnings do not look good for the First Quarter. A lot of bad news, weve already digested that. Oil is now stabilized. The dollar is weaker. Thats good news. I think we should have better earnings Going Forward. Also, the fed is being very accommodative and Economic Data is not that bad. Its almost like a double boost for the market. So thats why i think it is important to be in the market because the fed is going to continue with their dovish tone. Theyre not going to raise rates four times this year. And Economic Data is pretty good. So we will get over this earnings hump. So investors should be in the market. How many Interest Rate increases do you think were actually going to get . You said not four. Maybe i think well get one or two, just because the fed does want to move to that path of normalization. And Economic Data is not that bad. Its pretty darn good, especially with the consumer, jobs, housing. I think they want to move back to normal. But they are going to be very slow. Theyre going to be very cautious. Thats good for markets. Its good for investors. Weve seen that. We saw the turnaround on february 11th as soon as janet yellen came out dovish. The markets turned around. The dollar weakened. Oil stabilized. So thats good news. Chris, you said you got to do your research to find a quality company. Help a man out. Name a name. Super micro computers. Its heavily owned by insiders. The founder. It is a play on the crowd growth data centers. One thing that is secularly growing in this world is data. Storing it, moving it around. So Super Micro Computers is the guts to that trend. We like the management team. All right. Were going to leave the conversation there. Karen, we want to thank you this morning. Chris, thank you. Thank you. When we come back, the fallout over treasurys crackdown on tax inversions. Meg terrell joins us on the abandoned 160 billion deal between pfizer and allergan. As we head to break, take a look at yesterdays s p 500 winners and losers. Welcome back to squawk box, everybody. Right mow its time for the executive edge. San francisco passing the nations most generous family leave law. The city is the first in the United States to mandate six weeks of fully paid parental leave, requiring businesses with more than 20 employees, or 20 or more employees to double the pay that employees are now eligible to collect under california law. That covers either gender and fulltime and parttime employees who work in the city of san francisco. Pfizer and allergan set to call off their mega deal in reaction to the Treasury Departments new inversion rules. Meg terrell joins us with more. Good morning. This all moved very quickly. The new treasury rules just coming out late earlier this week. Of course, our david faber now reporting late last night that the companies are expected to call this deal off this morning. Hes reporting that its expected that pfizer will pay as much as 400 million in a break fee. Folks are basically saying that obviously it was these new rules from treasury that derailed this merger, and theyre saying they were so specific that this should be called the pfizer rule. Essentially, this is that threeyear lookback which would limit how big allergan can be considered when comparing it to pfizer. Lets look at what it next for pfizer and allergan. While you do see allergan stock coming down on this, people are pretty optimistic about the future for both companies. In terms of pfizer, folks seem to expect this could potentially accelerate a decision to split up the company, which investors have been cheering. They also expect to potentially see more biotech, m a coming from pfizer when they end this. For allergan, they do have about 40 billion in proceeds coming from selling their generics business. So theyre expected to take that and potentially do a lot of acquisitions as well. Probably not the end of buying for them. People say there are much broader implications of this rule for all foreign companies, particularly in the earnings stripping provision. You look at other companies that have inverted. You saw shire trying to do it. That was falling into the pfizerallergan camp, where they didnt do it. Also, covidien and medtronic. People are saying there are going to be broad Tax Implications for all of these foreign companies, maybe even more than treasury intended, guys. I just saw perigo on the screen. Theyre going to be impacted in a meaningful related to the ear stripping. Analysts say there could be Tax Implications. Theyre still figuring out what they are. Maybe a few percentage points. Uncertainty obviously isnt good for anybody. Thats kind of casting a pal over everything right now. Okay. Were going to leave it there, meg. It will be interesting to see what the Companies Come out and say. There was a great piece in usa today that was talked about on Worldwide Exchange from the ceo of best buy talking about how inversions have ultimately created jobs and makes a couple different references to some companies in the United States. Tim hortons, when they went to canada, a number of new jobs. I havent looked to see how they were created. Its an interesting one and a continuing debate. Were going to talk more about tax inversions at the top of the hour with aol cofounder steve case, who has a new book out. Also, Grover Norquist, who i imagine has some views about all this as well. So glad i have this read. I love the United States. I love nbc universal. Im not shy. When teams win championships and players are asked, what are you going to do next, they may soon be saying theyre headed to and i said great minds. I said this the other day. Theyre headed to Universal Studios. Not that other place. Thats because it has no leader, or is having trouble finding one. The wi the Wizarding World of harry potter opens thursday. The park held a grand Opening Ceremony for the much anticipated attraction. Is that John Williams who was just directing that . He quotes a lot of elvis costello. Who knew . The new part of the park includes hogwarts castles and the shops. Butter beer. They need alcoholic butter beer, i think. Some of the stars of the movie were on hand for the grand opening. The ceremony featured composer John Williams. The l. A. Philharmonic. They couldnt get the fed president , so they got that guy instead. Before we go to break, i also want to theres a lot of new verbs in the oed. Like google. Did you google anything today . Or tweet. Theres a bunch of them. Effort. Im efforting to get andrew involved. Did you google today . Did you see what google is today . I looked at it, but i didnt pay attention. Okay. Do you see it . You want to tell us . Youll see where im going with this. Oh, yeah. Thats commemorating the first olympics, the first modern olympics. 1896. But on april 6th, they started. April 6th through april 12th. Thats why google did that, which leads me to tell you, do you know how many days there are to the next summer olympics . Probably about 100. 121. August 5th. Appearing on all the great nbc stations. We get curling. Thats winter. But its on ice. We did it. I threw my back out. Anyway, that is coming. So mark that on your august 5th. Ill mark it on my calendar. They sold a billion dollars already. Advertising. That deal goes out to like 2030 with very little increase. We know sports are where its at. Coming up, the squawk planner. What to watch in the day ahead. And why some Patriots Fans are suing the nfl. Then, blues traveler frontman and harmonica legend john popper is here. He has a new tellall memoir with stories about his experiments with crack cocaine or the time that he sent strippers to distract phishs accountant to steal their new years eve gig. Its all straight ahead. The first stock index musiwas createdoughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. We learn things every day here. Welcome back, everybody. U. S. Equity futures at this hour are indicated higher after the dow lost triple digits yesterday for the first time in almost a month. Futures up by about 40 points this morning. The nasdaq up by 14. The fed is in the spot light today. The minutes from last months fomc meeting are out at 2 00 p. M. Eastern today. Investors cheered Janet Yellens cautious tone last week, easing rate hike concerns, at least any time soon. Now theyll be looking for clues in the minutes on when the fed may raise rates again. We have a trio of policymakers speaking today. Loretta mester, james bullard, and dallas fed president rob kaplan. Constellation brands is reporting earnings before the open, and after the close well be hearing from bed bath beyond. Whatsapp is ramping up encryption. The messaging service owned by faby facebook is introducing endtoend encryption. Every Whatsapp Message is now so secure that Law Enforcement cant even read it. Even if they have a warrant. This is the discussion weve been having about apple and the fbi all the time. Joe has made the point over and over that Technology Marches on, and this is an example of it. You could tell apple one thing, but then somebody else is going to do the encryption themselves. Here you have facebook doing it in this instance. The larger conversation going on in washington about what ultimately you do about all of these Different Services and whether there should be a back door, some way for government to have access to it in the instance in which you think theres a reason for it. I still have a problem with facebook. Like yesterday we were talking about facebook versus disney. I cant even believe you say those two companies in the same sentence. One of them you go on this stupid thing with your pictures from people that i mean are you suggests that Sheryl Sandberg is not no, im suggesting i dont think facebook is that i dont know. And therefore what . Therefore nothing. I just said i dont think i never thought id mention facebook and disney in the same faber used to do annoying aol comparisons. Five dow components you could own for the price of aol. That didnt make sense to me. I dont understand facebook. Whats the market cap . Double disney, isnt it . Is it double disney . I dont know if its double. 257. I think disney is 160. I dont understand. Shes a very qualified ceo. Youre the one that always calls them by their first name. Its not me. Im gender blind, completely. You know what they say the question came up, would sheryl rather be at disney or facebook. I think youd take the ceo job at disney. Well, no kidding. If youre the coo. Youre not sitting there looking at some stupid thing, i dont know, seeing someone on vacation, then an ad pops up. It has been revolutionary, but disney has been one of the most amazing companies. I use twitter now as a news feed. Anyway, you know what they say, if you cant beat them, sue them. Who says that . Patriots fans filing a lawsuit against the nfl, accusing commissioner Roger Goodell of acting unlawfully when he handed down the new england punishment to the patriots for deflategate, which included two lost draft picks. The group of fans hopes to see both picks returned to the patriots. And if youre wondering if your partner is swiping left or right on tinder okay, i get it. Thats how you look at people. In or out. Another sign of the coming apocalyp apocalypse. Theres a new app to help you find out for just 5. Swipe buster will track down a user by inputting their name. You can track anybody. You can find out if anybody is use tinder. Put in their last name and location. If you want to find out about an exboyfriend, your spouse, anybody else. Wow, thats a sneaky 5. Im looking for an app. Tim ferris was writing about a fascinating new tinder app. More men apparently choose women than women choose men. So it creates a sort of dislocation. Wow, thats the only time thats ever happened. Thats the story of every single guys life. Right. So theres a new app. The name is now escaping me. It only works if the woman chooses the guy. Within 24 hours, the woman has to send a note to the guy, otherwise it doesnt work. It creates much more matching and makes it less painful. Moving into i have other thoughts on this. Well wait to the break. I think one of the producers knows. Whats it called . Bumble. There you go. You know about bumble . No. Who knows this in the control room and why . Im not sure. Is thats a married man . Millennials, of course. When we come back, when you think harmonica, you think john popper. The blues traveler frontman is in the house. He now has a tellall memoir with all the stories hes not supposed to tell, like what sound bill clinton makes when you pick him up off the ground. He did that and a whole lot more, and he joins us here on set next. E trade is all about seizing opportunity. So im going to take this opportunity to go off script. So if i wanna go to jersey and check out shotsy tuccerellis portfolio, whats it to you . Or im a scottish mason whose assets are made of stone like me heart. Papa youre no son of mine or perhaps its time to seize the day. Dont just see opportunity, seize it applause welcome back to squawk box. We have breaking news just crossing the wire. Officially pfizer and allergan now calling off that deal. We did say it was expected, but it is now official. We should also tell you that the companies saying that pfizer has agreed to pay allergan 150 million for reimbursement of expenses associated with the transaction. Whats less clear there is whether that 150 million is in lieu of a breakup fee, which was expected to be about be about whether in addition. Theres a call later today at 10 00 a. M. With investors and analysts. Were squawking and rolling with one of the worlds leading harmonica player. The front man of the rock band blues traveller performing as a singer, guitarist and harmonica player. John popper is out with a new block suck and blow. You will say anything and tell anything. You know, its fun to try and sell a book. Youve had Pretty Amazing career, an amazing life. Thanks. What i didnt realize your history. Ive known your sister margaret. I didnt know about the history how you got into the harmonica. Theres a great picture of marg in the book. Well find that picture. Great family photo. I think it was lucky for us we got to start in high school so a lot of stuff happened to us while we were young. Turning 49 i just had a daughter, shes 4 months old. Good to get this book done before i forgot these stories. Youre not sleeping at this point. Pretty much. Our baby is a really good sleeper. One of the lucky. We lucked out on that score. You start looking at things differently when youre a dad because you know some day your daughter will read. I started thinking at what age do i let her read this. I wrote half of it before she was born and then the other half after she was born. Hopefully it will be a really nice sentiment she will read after the shock wears off. Age appropriate. What age . Im really going to check with her mother a lot. Im thinking college, you know. By the time she can pick up the stuff on her own. Getting whatever internet porn shes getting. You can confirm that drugs, sex and rock and roll does kind of go together, done it . Yeah. I think everybody agrees the sex comes first and then depending on the drugs at the time for second. Then the rock and roll. The rock and roll. I thought the rock and roll led to those things. Rock and roll should lead to those things but in todays whackado world sometimes drug leads to rock and roll. Sometimes sex leads to rock and local. In a bad case drugs lead to sex which leads to rock and roll. Youre not sure which is more dangerous, the sex or drugs . Hopefully if youre doing the sex right youre not being stabbed in the neck. Right. Lets talk a little bit about how you got into this in high school. You had the teacher who was the guy who was from whiplash. Yes. He was the same teacher for the director and the writer of the whiplash movie. I have to say he was not as evil as j. K. Simmons. But it was a High School Band so we western that good earth. J. K. Simmons was a much stricter task master and the result was a much better band. So who would have known. He never slapped anybody. But there was a scymbal thrown. The drummers were the first ones into led zeppelin. Before that our teacher had buddy rich drummers. He would get on the drums and stick his tongue out this wasnt shown in the movie youre being terrified by this man but you want to laugh. That was tony. He was like a sweetheart ultimately. I have a business music question. Today, do you think you could have the break out success that you had then given sort of the trends around radio, trends around spotify and streaming music and how the whole landscape has shifted. Thats a good question. I think we would have had probably had to figure out a different way to do it. You know how the grateful dead used to let people tape their shows. Happens this dealing with napster. The fact a Live Performance being record was more of a promotional product. I heard members of grateful dead oh, if we only charged people for that. Its a double edge sword. People would trade tapes. Every time they made an album you had to go buy it. So, you know, i go back and forth on it. I maintain that whatever options you have, whatever turns you have, you have to go and figure out to make some kind of a living. I think we would have made something of ourselves but probably a different way. Just trying to figure out how to get you to tell me who you like. Do you have sirius xm. Yes. What station your on . I generally listen to howard stern first. Music is always in my head. I watch movies. When im driving its talk radio. Who is new and who is good and new . Every time i say someone new my friends laugh at me because they tell me john, those guys are 10 years old. I here this theres this whole body of work. Im waiting for people to settle in before i decide i like them. Franco i discovered in 2004. You heard of bad company. They are not bad. Those kids are fantastic. John, we love having you here. Please come back any time. Any time. We love having you here. Your book is called suck and blow. Will you play us out . Absolutely. If my harp is around here, this is my last run. I have harmonicas for each of you. What key would you like . Im not sure. Give us what you think is appropriate. Well be right back to talk about inversions. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Ted cruz making things complicated for donald trump while Bernie Sanders continues his primary winning streak. The question now, could we see two contested conventions . We run through the results and talk politic, jobs, tax inversions and more with steve case and super Grover Norquist. Temper tax contaminate trump. Why new jerseys richest resident is flying south and not just for the winter. How florida is attracting actual tradition rich. The hog worth school of witch craft is opening. The red carpet was laid out last night for the wizardry world of harry party. Attractions it has to offer as the second hour of squawk box begins right now. Thats harry potter. I love it. Welcome back to box here on cnbc, first in business worldwide. Im joe kernen with becky quick and Andrew Ross Sorkin. The futures this morning were better earlier. Still okay. About 60 or 70 earlier. Were up about just under 40 right now. The s p up just under five. The nasdaq up 14. And check out oil. Oil was firm earlier this morning. Oil now up almost 3 which equates to a little over a dollar and just under 37 a barrel for wti. In studio to share his thoughts on the economy, the matters and politics, steve case, the founder and chairman of the case foundation, steve also founded the Venture Capital firm revolution. He serves on the National Advisory council on innovation and entrepreneurship and served on the president s council on jobs and competitiveness. You have a new book. He has a new book. Aol. We will have lots. Its going to be a long morning. A long morning. I walked in the wrong room at the wrong time. Do you that a lot. Were going to get you caught up on politics, the results are in from the wisconsin primaries. The theme of the night, staying alive. Senator ted cruz sending a clear message to donald trump that hes in it to win it. Senator ted cruz predicting the win will give him the momentum he needs to give Republican Voters and the delegates. As a result of the people of wisconsin defying the media, defying the pundit, i am more and more convinced that our campaign is going to earn the 1237 delegates needed to win the republican nomination. On the democratic side Bernie Sanders isnt going away so easily. Hes now won seven of the last eight caucuses and primaries. Despite face an uphill battle hes confident he can beat Hillary Clinton in her home state. Please keep this a secret, do not tell secretary clinton shes getting a little nervous. And i dont want her to get more nervous. But i believe we got an excellent chance to win new york and a lot of delegates in that state. Well have much more on the race for the white house results and what it means for future of america and your money. Well do that in just a couple of minutes. Greatest larry david imitation. Uncanny. Perfect. One of our top corporate stories pfizer and allergan terminating their merger following inversion rule changes. Still questions about the break up fee. Weve been waiting to hear more about that. Both companies believe the treasury overstepped the bounds of its Regulatory Authority with a crackdown on inversion. Neither drugmaker wanted to risk launching actions against the government. Shares yesterday were one 2k0 . Now down just over a dollar today. Taxing topic of inversion is buzzing from capitol hill to the campaign trail. Eamon javers has more on the inversion fallout. Reporter president obama had some very tough words yesterday for corporate inverters saying they effectively renounced their american citizenship. Heres what he had to say just yesterday. Jobs in march. Reporter okay. Looks like we dont have that sound but what president obama said yesterday that this was a loophole that companies took advantage of to lower their tax bill but sticking the middle class with the bill that everybody else has to pay. On capitol hill republicans said this new treasury rule was punitive but nobody on the hill was predicting that congress will take any legislative action of its own given the election season and limited amount of time left in this congress and this administration. Guys were left with a standoff here in washington where president obama is using the Treasury Department to tighten up the rules. They had dramatic impact on one of the deals that was pending. We have to wait and see what happens through the rest of the year here. But president obama linked those tax inversions to the Panama Papers case that broke over the weekend. You have a situation in terms of global taxation where wealthy people who have access to lawyers and accountants can do things that the rest of us cant do. He said thats simply not fair. We appreciate it. Joining us now to continue this conversation and share what he believes is the real problem behind corporate inversion, Grover Norquist is here. And our guest host this morning is steve case. Grover, i know you dont like inversions, but i also know you dont like the new law. The question is given that both sides dont seem to be able to do anything about it do, we just let these things continue the way they have . Well, thats whats going to happen until you have a different president who actually understands economics. We were told when obama was elected he was a different democrat, he was a chicago democrat, he understood business and a bunch of corporate ceos and for fine 500 people fell hard for it. Its now been eight years. This is not a secret. We have a 39 tax both federal 35 plus average state Corporate Income tax. 39 . The european average meaning half are stupid or better is 25 taking local and federal, national taxes. 39 25. So we shoot ourselves in the feet or our government hamstrings american businesses to try to compete internationally. Add to that we have a worldwide tax system of all the oecd countries, most do not, six do, were the only large country people wont disagree. Both sides say they want to reform the tax ked. The question is why they havent been able to and who is holding up the train . Thats obvious. Good ideas that everybody agrees on in washington, d. C. Are not known as pass legislation they are known as hostages. For seven years harry reid and obama when harry reid would let obama play, theoal was i want a trillion dollars in tax increase and then well think about your rate reduction. What has obama called for . Lets take the 39 down to 32. Still way off the charts compared to europe. Its not worth talking about. Thats his deal. Oh, but he wants a 680 billion tax increase to pay for it and a 660 billion tax increase for jollies because thats what he wished he had. He wants a trillion dollars plus in order for seven years he looked at ceo in the eye i know we need to do this but ill only do it if i get trillion dollars to spend on stuff. Hes holding tax reform hostage and we need a president who understands you take the top rate of 25 and go full expensing you gain trillion dollars. You dont have to pay for lower rates. They will give you growth. Steve, there was an interesting article in usa today that inversions created jobs in america. How are we supposed to look at these things . Its complicated. Some of this debate what grover is saying frustrates people. Both sides are having these harsh position. Things are not getting done whether its the tax code. We need a fresh look at the whole tax code. Immigration reform we need to take a fresh look at that. We wont do that this year. Irrespective who takes the white house, who is in control of which parts of the congress, hopefully people will start coming together. We say they will come together and then they dont and we criticize when treasury or somebody tries to take some kind of a step. Flip side, grover, what do we do in the next year, two or three this doesnt get resolved and we lose all sorts of american Iconic Companies who go abroad. As steve case pointed out inversions can create more jobs in the United States. Theres one in minnesota that the liberal Democratic Senators in minnesota cheer led for. If you stop mistreating American Companies by becoming Canada Companies they go up. Were not damaging other countries with our high corporate rate were hurting american workers. Thats who is being damaged. And we need to explain to the politicians fix this and dont hold it hostage for your wild spending plans. This is completely flexible. The real issue is how do you take a look at the tax code and look for the right neincentives for investments. Right now were tweaking around the edges of the problem. If obama or democrats say they want 28 or 25 then somebody else says but the other side says it should be 15 and the spread gets wider. You sit down and have to cut deal. This is why people are angry. Its going to get more complicated Going Forward in the next wave of innovation. Unless we figure out a way to remain competitive as a country and more broadly in the world were going to lose our way. You asked grover, he answered you. He wanted an additional trillion dollars. The president has to spearhead. You have harry reid that wont move interest. The bully pulpit is the only way to get it done. You schumer, liberal democrat new york senator has been working with the republicans to try and get something done. Knees how damaging this is to new york and the country. Its obama who keeps saying no. Obama and reid. Not just our Companies Moving to change their headquarters, its our assets are more easily purchased by companies from abroad because they can do better with them where their tax rates are. You cant stop that. Were still going lose all our assets. Not u. S. Companies moving out its everybody else can buy us because they can make more money because they pay less taxes. You also have the stripping issue which comes into play no matter where youre from. But i dont think Big Companies or any company should be making big strategic decision based on the tax code. Pfizer did. Thats partly because they were saying well take advantage of this capability. Once it was closed okay were not is going to do it. If the merger made sense it should have made sense with or without the inversion. But company have doubled he would have had a billion dollars more to put in r and d. Would that have bean negative for a humanity that a preeminent Research Organization has a billion dollars nor spend on research. Somebody would have a billion dollars less to spend elsewhere. Its not about any one company or a particular part of the tax code. You cant move forward and be competitive as a country unless we figure out the right way to incent the right kind of behaviors. Jobs, capital should want to stay here. Innovation, entrepreneurship should want to stay here. Its moving abroad. Were seeing the globalization of entrepreneurship and innovation. I dont know how many times you need to connect the dots for had administration to see that would have bean good thing. Why not do it . My guess is people in the administration, i talk to some of them, do believe how to prioritize different legislative things. When people are talking about tariffs and how globalization has been terrible for the globe now were talking about an open policy. If you change the tax policy to make it more effective youre saying let it be all open. Most people are saying free trade is good. A lot of frustration, a lot of people are left behind. Folks like you are saying globalization are wonderful. Feels like im losing my job. I understand where youre coming from. Thats whats driving some of the sanders campaign. Corporations do well because of globalization a lot of times workers are not. Its like a talking head. Jump in the fray. Theres an article today why are these the five best people we have. Why dont you run for office. I have to work for a living i dont own an island. Justin first few minutes. Grover, were simpson and bowles on the right track . The challenge with simpson and bowles they tried to do with it a massive tax increase. The idea of reducing marginal tax rates is great but their plan was a 5 trillion tax increase over the next decade. Thats why it was a nonsecretary of state. They talked about lowering the rates. The only numbers in simpsonbowles were on the page, the page numbers. They talked in generalities. But it was a massive tax increase and didnt tell you where the money would come from. The first half of their conversation rates needed to come down. That was great. Then they did what obama wants to do which is dramatically increase taxes other places unspecified. The challenge that we have with the obama rules we have now, thats why 2 trillion or so is not coming back to america. I think you can make this case to trump supporters. We have a stupid tax policy that makes it difficult to impossible for 2 trillion of american money earned overseas to come back to america to create jobs. Thats what our tax policy does. Keeps 2 trillion out of the United States. Thats stupid. And there should be no tax on that money coming back. We should invite it back tomorrow. We dont want these foreigners touching our money. I want it back here and creating jobs. Thats what our destructive tax policy for the last seven years has been doing. It needs stop. Simpsonbowles i think was an effort to bring people together to force a compromise. A lot of people on the republican side just heard grover didnt like it. It was dead on arrival. If that kind of compromise doesnt work Something Like that. Maybe tweak around the edges. We need the political will on both sides to dome the center. God bless you and your optimism. Steve will be here for the rest of the show. Grover we thank you for your perspective and being part of the debate. A programming note. You dont want to miss this. Brent saunders will join squawk on the street at 9 00 eastern time. Larry kudlow was going to run for office for senate in connecticut but he came to the conclusion he can do more where he is at cnbc and i have to the push back against the misguide conception of the mainstream media. I need to stay here. Coming up, will ted cruzs win in wisconsin complicate donald trump us a path to the white house . Well talk politics with steve case next and then later david tepper leaving the garden state for the sunshine state. In new jersey the tax is 8. 7 . He made 2 billion. Round it to 10 . New jerseys richest resident is going to florida where they dont have an income tax. Saving him hundreds of millions of dollars. That and much more when squawk box returns. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back, everybody. Our fweeft host this morning has been and instrumental voice for the entrepreneur. Steve case is the author of the new book the third wave. Hes with us this morning. Steve great to see you. Congratulations on the book. Thought it was time to write a book. I talked about it for 20 years. The next wave of innovation will be much different and theres some lessons i learned that i thought would be helpful to entrepreneur as and Corporate Executives to think about this world thats moving so quickly and getting disrupted. Lets talk about what the third wave is. The third wave of the internet. The first was the building the internet. The second is the apps. The third wave is the internet of everything. The first wave when we started 31 years ago 3 of people were online and only one hour a week. That was building the foundation, the servers and networks getting people connected. That was 1985 to 2000. Last 15 years the second wave has been building on top. Apps, service, facebook, twitter. Those opportunities will continue. In the third weave well see internet become more pervasive and be the internet of everything. Spread ago cross our lives, health care can be revolutionized, radiation, transportation, energy, even sectors like food that havent changed much in the first or second wave. Were not talking about the internet. Nobody says this is electricity enabled. People stale talk about internet enabled businesses. Internet will and the for granted. I watched this play out for three decades weve seen media and communication transform. But arguably the things that are most important how do we stay healthy or how do our kids get educated or how do we decide what to eat or manage energy or figure out ways to borrow money. It hasnt changed that much in the last 30 wears. It will change in this third wave. That stuff is revolutionary. Handy is effectively a cleaning company. Its app enabled. Part of what some call the gig economy but the flexible economy the workers in that economy decide when they want to work do, they want to work late hours or on weekends. Consumers can access that more affordably and conveniently. I want takes that uber on demand model and applies it to other businesses. Its growing rapidly. Part of this flexible economy thats emerging. Force redefinition of work which we should talk to the secretary of labor on. Steve is with us for the next two hours. When we come back well check out wall street. Looking to bounce back after yesterdays weakness. Stick around, squawk box will be right back. Thats right. I have read it is the hardest job in the world. Thats why im here. Can you. I can offer advice from the accumulated knowledge of other educators. Thats wonderful but. I can tailor a curriculum for each student by crossreferencing aptitude, development, geography. Sorry to interrupt. But i just have one question how do i keep them quiet . pause watson . There is no known solution. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov this cit added this other level of clean to it. It just kinda like wiped everything clean. My teeth are glowing. They are so white. I actually really like the two steps. Everytime i use this together it felt like leaving the dentists office. Crest hd, 6x cleaning, 6x whitening. I would switch to crest hd over what i was using before. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Welcome back, everyone. Among the stories front and center this morning pfizer and allergan terminated their merger. The two drug makers abandoned their planned deal after treasure aess implementation of new rules to discourage corporate inversions. Mortgage applications rose by 2. 7 last week. That was entirely due to a jump in refinancing activity as average 30 year Mortgage Rates pell to 3. 68 . Investors looking to 2 00 p. M. Eastern time when the fed will release the minutes of its midmarch meeting. The street will be looking for any new insight on pace of possible Interest Rate increases. Fed minutes are out later today and if they dont match expectations chances are markets will be more confused. Here to help to put things into perspective is president of the wells fargo institute. You might say things at wells fargo. And chief Investment Officer at oppenheimer funds. Welcome to you both. You think these are important. We dont know what was going on. Yellen tried to push back on the hops. I dont know how important they are but what youll get is a much more hawkish look later today because obviously when you had yellen come out in the march meeting at the press conference and be very dovish then you had all the voting and nonvoting fed president walk those comments back and yellen showed up at the new York Economic Club and became an uber dove again what youll start to see is this contested debate that goes on there. The other piece, the one piece im watching closely on the National Intelligence will be on what the debate is around inflation. Because yellen walked back expectations on inflation yet the core numbers are going up, wage average hourly numbers are going up. So that will be what the market holds. Were at a quarter point or whatever and arguing about whether were going up one or three times for the rest of the year. And you say the outlook for equities is entirely dependent on the act of central bank policy. Who cares. Thats part of the problem. Guys like you say its based on these guys. They never used to control our lives did they . It really is about what the Interest Rate is going to be on a global basis. On a global basis not just about the u. S. Any more. U. S. Sicyclical pressures but whats going on in europe, japan, china to make the fed far more accommodating. But the dollar has weakened and that was the main risk. All the manufacturing, ceos in this country say dont raise rates we cant handle it. Were back to 113, 114. The fed has cover. Why not start normalizing. They can but the end result would be the start of dollar would start appreciating. We back up 10 . You dont go to new highs. Dollar is significantly higher than where it was a year and a half ago. If we can raise rates effectively well be transferring growth from the u. S. On to other countries. Why endeavordid every treasu secretary say a strong dollar is in the best interest of the country. It is. You just said something else. When the u. S. Economy is deleveraging we cant absorb those flows. This is a new era. This is not how things used to be in the 80s and 90s and things like that. We have to be careful and make sure we dont shoot ourselves in the foot. Lets get some comments from someone who runs an institute. Who is thinking about dollar signs. Does that make sense the story on skrins is whatever central bank will be or perceived to b tightest is whose currency will strengthen. Period. Thats what it comes down to. When the hike pulled back from four Interest Rate hikes to two. I did some math yesterday. If you looked at remember how the Labor Force Participation rate has been going up in the last six months. Just back that out. It stayed steady for the past six months. The Unemployment Rate would be down to 4. 1 . We would be having a very different conversation at almost 4 Unemployment Rate with no slack. Higher Participation Rate is a good thing. Great thing. I agree. Im just saying from a fed perspective a different conversation if youre 4. 1 unemployment and core prices today are a little above two analyzed. So youre at that 2 target that the fed wants. We were worried about the nibblely low Participation Rate. And whether its structural or cyclical. Great things getting those people back in. My point you would have a different market space conversation if that data was showing a little over 2 core inflation and 4 Unemployment Rate. Were not looking at dual mandate. We have to look at the rest of the globe. In a deleveraging world if you do things unilateral you create problems for yourself. Thats what the fed realized in the last year and a half. When japan seizing, when europe seizing and you go down the path of tightening because your economy is growing at 2 youre asking for trouble. Can i ask both of you a question. This new fiduciary rule does it impact either of you guys . Absolutely. Fiduciary rule be a big thing for the Asset Management business across the board. Advisory business and asset managers. This is something we have been anticipating for quite some time and the repairing for. Good or bad . I think the way theyve come about it is not the best way to do it, right . The right way to do this is to go to the lowest cost solution and cost is the only driver or fees are the only driver. There was a much better way to look at the risk based how does it change your business we have the Third Largest broker dealer in the country and sixth largest Institutional Trust business which are affected by dol. It forces you to think about the Business Model about how and where you have to conform and well see that later today. We know directionally where the deal is going but we havent stein details. It will come out today or tomorrow. The writing is on the wall, negative rates. Cant get out of their own way. Were not getting anything for staying at zero and the risks are building that everybody is addicted to this now. Its one of those counter factuals, if they didnt do it it would be even worse. For japan yes. Japan is where things started. And if we dont have monetary accommodation thats where all of us will end up given the structural issues facing the world. Thanks. Coming up, moving out of new jersey, hedge fund superstar david tepper taking his billions to the sunshine state. How does tepper tax tantrum will impact the garden state audiotape big way . A lot of money. As we head to break, check out the futures. Still up but not as much as they were before. Well be right back. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Because you cant build the business of tomorrow the first stock index musiwas createdoughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Welcome back to squawk box. Billionaire hedge funds manager david tepper is leaving the garden state seeking Greener Pastures in tax friendly florida. We have more on this story. David terp filed a declaration in december making florida his official Tax Residency and in january his hedge fund also moved its official headquarters to miami. Now people close to tepper tell me he moved to be closer to his mother and sister, but it will happen to save him millions, hundreds of millions of dollars in taxes and as you mentioned florida has no income tax. New jerseys top tax rate 8. 97 . Tepper has earned more than 6 billion since 2012 so his official state tax without any deductions, et cetera would have been a half billion over that time. In fact he pays so much in taxes the state budget expert warned about a tepper tax effect that we may face risk if news reports are true that tepper has moved. Now new jersey collects 40 of its revenue from income tax, a third of that paid by the top 1 . Despite a tax hike 40 of all the revenue. Its a third, just by the top 1 . They had a tax hike, that millionaires tax hike in 2004. Since then millionaire population in new jersey has grown over the past decade. People that predicted armageddon that the rich would flee have been replaced by newly minted millionaires. Cupperman was a new jersey resident and now in the florida. Chris christie has to get on this. He should start courting these guys to stick around. I can hit an 8 iron. Eddie lampert moved down there. Im talking about northeast high Tax Hedge Fund guys moving to florida. Its adding up. Now 60 hedge funds headquartered in florida. There are certain studies that say millionaires dont move just because of taxes. Tennessee and New Hampshire had no taxes but people arent moving there. You dont know whether tax were the reason or whether they were one of many factors. We got a guy here who knows people with some money. We do. What do you think of this, sir . Im not a fan. I know people who have done it. You mentioned earlier you did as well. If people have been successful, i think they have a role to continue to contribute and just taking the money and avoiding taxes im not a huge fan. Bigger issue here and we talked about it all morning is how you have a more consistent tax code. The difference between say florida and new jersey, the difference around the globe, around inversions, in france when a new president came in he put 80 to 90 tax rate people moved to switzerland. Dont you like the idea of competition . Of course i like the idea of competition but i like idea of some consistency so people arent making decisions where to invest or where to live based on the tax code. Thats the tail wagging the dog. When you make over a billion dollars a year that can being meaningful. How many activities of the wealthy are driven by the tax code. Oh, yeah that was done for tax reasons. You must do a lot of things for tax reasons, tax efficiency. I am not focused and say what are the Tax Implications. We could have 20 years ago. But we chose to stay in virginia and support the d. C. Community and invest financially through evolution. Its a reminder we have a complicated world out there and incentives arent there. The government is so effective with the use of their money. Is there any tax rate too high where you would say maybe i would move. Maybe 90 . I was in france, i would move. I understand that. Its hard. You can tease about it. The thing is is there any level where its too high . Everybody would rather pay less tax. Would you move at 90 . He just said yes. I just wonder snooped how do you strike the right balance . The Biggest Issue that doesnt get enough attention how do you create enough incentives to invest in the high grot start ups. In the last budget bill there was a carve out for Capital Gains. Its not just about Capital Gains generally or carried interest generally or kind of corporate tags rate and inversions. How do you have a tax code thats fair and set and creates the right behavior where we take more risks. Some will fail but great jobs and growth. Outside of Silicon Valley and other areas to reinvigorate these areas i have a whole chapter about the rise not just Silicon Valley or new york. Last year 75 of Venture Capital went to california, new york and massachusetts. How do you incent other people to invest in these places. You have to take a broad view to make sure america remains competitive globally. Well try to make the point you use the micro intrastate moments in the United States when the whole countrys tax rate is too high. You see what happens to illinois and what happens in high tax rates where millionaires leave and the revenue base goes down. You can extrapolate that to the country as a whole if were not competitive money flee us as well as it flees the high tax states. By the way living in the d. C. Area, virginia, maryland and washington, d. C. , basically are all right next toech oth each o they have different tax rates. But they are closer than new jersey and florida. We have to do a quick break. When we come back, allerganpfizer deciding to call it quits after new tax inversion rules put the kabosh on their merger. And at the top of the hour no backing down from donald trump or Hillary Clinton. President ial hopefuls ted cruz and Bernie Sanders make their case for the white house with wins in wisconsin. A powerful Political Panel is straight ahead. Squawk box will be right back. Were good. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. It fits. Visitors to Universal Studios in hollywood can take a trip to the world of harry party. Last night the park held a grand Opening Ceremony for the much anticipated called the Wizarding World of harry potter attraction. A new part of the park includes Hogwart Castle and shops. Ceremony featured the hogwarts choir and composer and the l. A. Philharmonic had policemen of magic. Before the doors opened some stars talked with red carpet and talked about the excitement of returning to the world of harry potter. To actually stand or walk through hogwart itself is taking itself to the next level. Its more about an immersive experience where you can live like a wizard. That was him. That blonde guy. Such a horrible guy. Designee looks much nicer now. He does without without the creepy white hair. The haggart still around in i dont know. The other guy is dead. The lady from downtown abbey is on there. And gandolf. Wrong movie, lord of the prescription. I thought you talked about money and finance. Its full service. Thanks for watching. With you here we should be talking about money. Okay. We will from here on out. In the meantime well talk about a few stocks to watch. Those are pfizer and allergan two companies terminating their merger. Talked a lot about it this morning. The inversion rule changing this whole game here. Pfizer will pay allergan 150 million break up fee as per the tie up agreement. There was an expect jays it could be as high as 400 million. It landed at 150. Both companies believe treasury overstepped the bounds of its regulatory province. Lets get back to our guest host today steve case who is the author of the new book the third wave. You mentioned the gig economy and its a huge topic of consideration in this election cycle. Hillary clinton said the gig economy is concerning people dont have full time jobs. You have a different take. What started as a freelance economy now becoming a gig economy or flexible economy. When i was growing up people worked for Big Companies. My dad worked for the same company for 60 years. When i graduated from college i worked for several companies. Now people work for several companies in the same day. They have more flexibility in terms of their schedule. They can work when they want to work. Not work one morning to do something at school with their kids. They have that flexibility. By taking out the middle man it becomes more affordable and convenient for the customer as well as people working to make more money. We havent figured out how to think about this. We have full time workers, contractors and how do we manage this flicksible economy, this gig economy. What should the rules at a minimum there needs a third classification to talk about people working in this flexible economy. Contractors basically usually have projects where they are working maybe for a few weeks. This is working sometimes a few minutes and many times working for different kinds of companies. How District Attorney you think about that. Should there be a safety net . The concern that Hillary Clinton has kind of picked up on, look you may be working on a lot of jobs and gives you flexibility theres not a safety net. Thats one of the debates. This is still new. People want to let it run and dont want to put too much regulation on it or put things on it that would raise the prices it. As it expands, as we saw the internet expand initially no tax on e commerce. People said now it makes sense to do something. At some point it will make sense. Let it grow still. Let it run still. Still at some point a new classification. At some point rules of the road in terms of core benefits to make sure people in this freelance economy, flexible economy have some kind of safety net and its clear what the rules of the road are in term of the relationship with these people with the companies they are working with. Steve is our guest host. Well talk more including about his idea on disrupting america too a little bit later. When we come back, a battle in the badger state leaving cruz and sanders with delegate wins p. M. Democratic strategist Steve Mcmahon will join us to break down the road for the white house. We have much more on box. Well be back in just a moment. We got another one. I have an orcogram for an owen. Thats me. You should hire stacy drew. She wants to change the world with you. She can program jet engines to talk and such. Her biggest weakness is she cares too much. Thank you. My friend really wants a job at ge. Mine too. Im a wise elf from a far off shire. And sanjay patel is who you should hire. Thank you. Seriously though, stacy went to a great school and shes really loyal. You should give her a shot. Sanjays a team player and uh. The deal is dead. New this morning pfizer and allergan officially pull their megamerger. Are other tie ups in trouble. Decision 2016, ted cruz and Bernie Sanders notch big wins in the race for the white house. Are party frontrunners donald trump and Hillary Clinton still in control. Two top political strategists join us to discuss. Litter bugs be warned. How drones are being used to crackdown on trash. The final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with joe kernen and becky quick. Were live here on tv and also live with our guest host steve case. On facebook live. Its happening duo. Youre the camera man. I wanted to turn the tables here a little bit. Youre all sitting there telling everybody what to do. Empower people. This is the internet. Leveling the playing field. Were on. Were on right now. Very nice see you and hello tomb out there. Were less than 90 minutes away from the opening bell on wall street. Futures right now. You cant get the screen right on facebook right now. You have to watch live television. You dont know the dow will be up by 53 points. S p 500 looks to open up six points higher an nasdaq to open about 16 points higher. You dont have clearance for that, sir. Turn that off. Wti crude 36. 95. Among our top stories this morning, pfizer and allergan terminated their merger following new treasury rules designed to discourage inversions. Pfizer will pay a aler allergan. Brent saunders will be on squawk on the street at 9 00. He updates us on the new noninvasive type surgery. I have one wrinkle to throw at you. So to speak. There had been speculation he could ultimately get the job to run valeant after this transaction potentially. Now that these two companies are remaining separate would you want valeant at this point . I dont know except to say clearly the board of valeant is desperate to find the pharmaceutical version of lee iacocca to fix it. Ill turn this off because we have a rights issue. But you have to hold up my book and then ill turn it off. Well talk more about the third wave later. Aol was always a marketing machine. Butch the ratings here on squawk box. Its competitive. Can you tell from that thing both of them get that . Oh. Now im going to keep it on. Thats fine. You get nervous. This is called the internet, joe. This is the internet. Im looking at this thing. With 30 viewers. Does it say 30 30 viewers. Minutes from the last fed meeting will be released at 2 00 eastern. Always worth watching a trio of policymakers speaking today. Cleveland fed president , st. Louis fed president and this new guy that we havent had on yet has kaplan been on. Steve liesman is slacking. Hes new. Richard just left end of last year. All right. In other Economic News Mortgage Applications rising 2. 7 last week. That was entirely due to a jump in refinancing activity. We do have a few stocks on the move this morning. Constellation brands posted better than expected revenues. That stock is up by 2 . Wells fargo downgrade from neutral. The stock is fully valued relative to its peer group. The stock is off by 11 cents this morning. Cisco upgraded to neutral from underweight at jpmorgan. The analyst is arguing analyst estimates are conservative enough to offset the risk. Now lets talk a little politics. The results in from wisconsin. John harwood joins us now. He has the numbers and new delegate count. Reporter andrew after we got third wave of exit polls, yes that was a nod to steve case and the votes count last night we had what we had been waiting for in the race. A large state in which both frontrunners donald trump and Hillary Clinton got whipped. Lets look at the democratic results. Bernie sanders had a clear majority over 50 . The question is how many delegates does he get. Democrats award them proportionally. Republican side donald trump had a larger margin of victory. 48 to 38 for trump. He looked at those results and said this race will become a different race than its been. Take a listen. Tonight is a turning point. It is a rallying cry. It is a call from the hardworking men and women of wisconsin to the people of america. We have a choice. A real choice. Reporter that rallying cry that ted cruz is invoking is about the antitrump forces which appears tube majority within the Republican Party. The question is how many of them are in new york which is the next big state to vote in two weeks. Polls are showing donald trump with well over 50 of the vote. Well see whether ted cruz has generated some momentum so he can consolidate vot and begin winning delegates. Donald trumps task in getting to the 1237 he needs nominated got steeper. He wasnt shut out entirely but have to run the table with these big states especially the winner take all states. Bernie sanders has got a very difficult path because of the democrats proportional allocation to overcome Hillary Clintons lead. All right, john. I looked away for a second. Trump gets how many does cruz get . It doesnt narrow the gap. Just by not going trump its harder to get 1237. Reporter it narrowed the gap a little bit. The last total that i saw was 33 for cruz, three for trump and one or two congressional districts yet to be decided, so depending on the outcome there well see how much ted cruz narrows the gap in a winner take all environment if you win big states like california, huge bunch of delegate, donald trump has been leading in california, if he can cash in those chips he still has a chance to get 1237. Were totally confused with the other side because of the super delegates. I have no idea how that works at this point. Reporter those super delegates are people who look at the bottom line, look at november and make decisions accordingly. Shes almost the finish line. Reporter yes close to it. Not there but close to it. And for Bernie Sanders to flip those 400 super delegates, he has to generate a collapse in confidence in her candidacy. Shes vulnerable, Everybody Knows shes vulnerable. But you havent had a collapse in confidence among democrats. Unless he can do that perhaps by beating her in new york her home state, maybe he would have a chance to get some momentum behind that argument but he hasnt proven that yet. All right john. Joining us Steve Mcmahon democratic strategist and cofounder of purple strategies. Was that found by prince . What is that . Red and blue together makes purple. Everything you need to know about it you learned in kindergarten. Red and blue together purple. I called kindergarten my senior year. Former minnesota congressman vin weber. I want to start with you. You said Something Interesting in the preinterview. A couple of weeks ago the gop establishment was actually trying to come to grips with a trump candidacy and that got derailed and thats no longer the case and i guess last night will not help. No. I think its the case that a few weeks ago trump was on a roll, looked like he would get close to if not over the 1237 number and lot of the republican Party Leadership was thinking how do we get comfortable with this, hes a deal maker, hes a negotiator, maybe we can get comfortable with him and try get the party united bethe hind guy. A couple of things happen. It doesnt look like hell win. Second of all, hes gotten himself in a mess with the abortion issue over the last few weeks. Hes gotten in a mess over tissue of nuclear weapons. These are big, big political mine fields that the average politician not even the great politician, the average politician manages to avoid. I think that this momentum within kind of the establishment, if you want to use that term to get comfortable with trump has been stopped cold and last night it was buried in wisconsin. You got a different case, steve, on the other side and that is i mean i would like to just assume hillary is the nominee and just get started. But still this is dragging on with Bernie Sanders. We got to hear farm left rhetoric and, you know, democratic socialism and hillary moves out that way. I wish you could get point and see what you thought in the general election. But you cant because the guy will hang around. Yeah. Thats the thing about democracy. Everybody gets a vote. Bernie sanders has momentum. Hes won six out of seven of the last contested primaries. Hes going into new york with a huge amount of momentum. Every time he wins he raises tons of money. His message will be well fund. The math doesnt change. Last night on the republican side, ted cruz got 30 more delegates by beating donald trump. At least 30 maybe as many as 36 more because there are still six left to determine. On the democratic side Bernie Sanders won by a similar margin but only got three delegates more than Hillary Clinton. This thing is effectively over by the math, but well continue doe it make her stronger remember republicans in the primary they love the damage their main candidate, remember what happened to mitt romney from newt gingrich. Is this helping her to make her Battle Tested or damaging her depends on what happens at the end. At that robust debate inside the party is good. Bringing these new people in is great. The question is whether the party comes together. It does, then well be fine. Nothing smo billizes democra s nothing smo billizes democo mob as donald trump becoming president. Let me read something to you and you both cancomment. This is in the wall street journal this morning. Effectively writing Donald Trumps obituary. Said trump has never been all in. The most obvious way is his willingness to put up his own money. His unwillingness to work out the path to the presidency, his mittment to do it to succeed, to control his mouth and recruit credible advisors. Do you agree . Absolutely. The great reality here, weve been mesmerized by Donald Trumps reality show for a long time. Hes run terrible campaign. Its beginning to shine places like louisiana where he didnt get the delegation. Cruz got the delegation. In wisconsin last night. Yeah. If trump had run a professional campaign put in some of his own money, he might be in a much stronger position. Hes in a very weak position. In fact i go so far to say as of the three remaining candidates on the republican side the least likely nominee is donald trump. Your saying ted cruz will be the nominee . You think somebody i didnt say that. I think cruz is more likely than trump. I think kasich is more likely than trump. After the first ballot nobody gets a majority. I dont see anybody moving to donald trump. People will move away from him. If you land somewhere in the middle wont that suggest the whole thing is so broken that when it comes to actually the National Election it becomes much more complicated and difficult. Im a long time friend and big admirer of paul ryan. Im from a state where we choose candidates through conventions. The delegation almost accomplice prefer someone who has worked for the nomination, even if they lost the primaries, even if they arent first, second or third, somebody like kasich, rubio gone through the primary process, gone through the dabts, asked delegates for their support is preferable than somebody who hasnt gone through process. Its the beginning of the marco rubio for president. It could be jeb. You are right now. But, you know, this will probably go to convention. He wont get 1237 votes going in. And bleed out on the floor. After the first ballot people who are these delegates they dont like donald trump they are bound to him. They have to vote for him in the first ballot. They want to vote for somebody else. Vin is right that donald is the least likely nominee. Republicans will be increasingly looking outside the field whether its marco rubio or paul ryan. Paul ryan is one of the few figures in the Republican Party that has lines into these groups. That are fight and he could be a consensus presumably, bring people together, be a presumptive nominee. They have to choose between Hillary Clinton and paul ryan and if youre a republican, you know, thats not very difficult. Hes going to bleed out. I thought purple was kinder and gentler. Do you know what that means these are all Establishment Republicans who dont want to support trump. I dont see him bleeding out. Hell slowly lose the blood in his body. Thats not any better. I think trump just got a little cocky. Starting to think he was going win. Picking out the marble for the white house. Shoot someone on the streets of new york and still get elected. He said that. If you look at the data we still that have New York Primary coming up and he could pick up momentum again. Could very well. Its never over until its over. My guess it will go the convention and it wont be trump. Were moving in a different direction. All right, gentlemen. Thank you. Im so happy with the you love homer jenkins. Its an unrequited love. I wonder if it comes back the other way. I have no idea. Maybe paul krugman. I read him twice a week and 99 of the time not only do i agree with him i think its the smartest thing ive read. Homer jenkins. You like the wall street journal Editorial Board. I like jenkins. Coming up, a rechargeable protective case for your tablet. Well tell you what amazon has up its sleeve. Dont miss this later, bill pulte will be on. His grandfather and another pulte board member leaving the board. Hell shine Halftime Report at noon eastern time. In the meantime youre watching squawk box right here on cnbc, first in business worldwide. Well be back in a moment. Welcome back to squawk box everybody. In our headlines amazon is working on a hiring version of the kindergartenle tablet with a rechargeable protective case. It will provide better battery use. They are developing a solar charged kindergartenle case. Amazon is declining comment. Jeff bezos said the latest version of the kindergartenle is ready. Daimler is in talks with microsoft in its digital mapping service. Daimler, audi and bmw bought the Technology Last year for 2. 8 billion. First tech firm to join that venture. Deal could create a Global Platform for connected callers. When we come back a tough decision for a long island teen. And amy schumer has an wish the latest issue of glamour. Well tell you why. Welcome back to squawk box. Today in sports news the university of connecticuts Womens Basketball team broke history tuesday night by winning an unprecedented fourth Consecutive National championship. This game was never in doubt. The huskys beating the orange by 31 points to cap off the season. Uconn women have won 75 consecutive games. Brianna stewart became the first player to win the most outstanding player award in four straight final fours. Three athletes have won four consecutive and first three athletes to ever do that in mens or womens. Harry pot certificate hoping to cast a spell on southern california. Universal Studios Hollywood held a grand opening for the Wizarding World of harry potter attraction. It has Hogwart Castle and shops. John williams and the l. A. Philharmonic. The attraction opens to the public on thursday. We should say universal a part of our Parent Company comcast. Fourth time you said that. Fourth time you plugged the park. In this case it is money. Can i get a plug in for my book. Thats the only reason youre here. Primary reason im here. I have books to sell. Everybody has work to do. Okay. All right. One long island teen has a tough decision to make. She hit the ivy jackpot accepted to all eight Ivy League Colleges and accepted to jone hopkins. Nyu. Mit. She has until may 1st to decide. Second year in a row a senior was accepted to all the ivys. You usually propose cornell is easiest to get into harder to do well. She should not go to cornell. I think its a wonderful university. Go big red. All right. Even though its harder. Its hard when youre up there. Is there one thats the easiest to go through . I think theres great inflation. Does it begin with h. I didnt hear that. Which one have you heard p. I wont say anything. What does warren say praise my name criticize by category. Is that a Warren Buffett quote i believe so. Joe hasnt figured that out. Coming up, this moanings top stories including pfizer and allergan. I have a colonoscopy later today. Second one of the day. First we head to break take a look at u. S. Equity futures. Youre watching squawk box on cnbc, first in business worldwide. Welcome back to squawk box remember everybody. Lets get our headlines. Monsanto is out with earnings. Came in with a profit of 2. 42 a share two cents short of what the street was expecting. Revenue was also below the streets forecast for taggal chemicals maker. Monsanto sees strong growth beginning in 2017. Amazon. Com has expanded free same day deliver for prime members to 11 more markets. Cincinnati, charlotte, tucson, milwaukee, louisville and nashville. Oil prices are higher this moaning on renewed hopes for an output freeze. Crude oil prices were higher yesterday. They are up almost another dollar today to 36. 80. Next key event is the Energy Departments weekly report on inventories that comes out at 10 30 eastern time and supplies have been hovering near record loss. In other news dubai is using drones to crackdown on littering. The drone will monitor waste dump sites and beaches and desert camp sites for violators. The citys strict sanitation laws. Amy schumer has a beef with glamour, magazine. She was mentioned on the cover of plussize edition along actress melissa mccarthy. She called her out despite shes a between size 6 i shouldnt be reading this. Plussize is usually 16 and above. Schumer writes the magazine never contacted her to let her know she would be featured. She point out she thinks these plussize models are beautiful. Her concern is if youre telling teenage girls shes a plussize what message are you sending. Why shouldnt you read that. Because youre a size 2. That too maybe. You are you do have a really good figure. I appreciate that. Harder and harder. It does. Lets check this out. Two florida men gone fishing caught something huge. They saw a 15foot 800 pound alligator. Donald trump may have an ally on one issue. In an interview with the New York Daily News Editorial Board Bernie Sanders says he wishes apple would make some devices in the u. S. Versus china. Stop destroying the fabric of america. I do wish they would be manufacturing some of their devices here in the United States rather than china. I do wish they wouldnt avoid paying their fair share of taxes. Trump has railed against the company for not creating more u. S. Jobs. Apple said if they assembled it here the price would surge to nearly 1,200. Steve case has a new book out called the third wave, our guest host of the morning. One of the great marketers right here. Let me ask you this. We talked a lot or you talk about it in your book about the gig economy and a couple of other things. Theres been an argument made that the gig economy, while giving you the flexibility as an employee is a great thing its actually pretty lousy. Lousy for wages, lousy for job security, lousy for at that lot of things. I think the jury is out on that. Theres some concern about that which is legitimate. Some things were involved with, people are making more than they were making before. When you hear Hillary Clinton say she will look at the uber model and has serious concerns about it. People should be looking at it not just the uber model but this bigger gig economy or flexible economy because its a whole new class of work. Didnt exist five years ago. Millions of people are doing it. What is it . How to think about it. So well make steve case king for the day what should the rules be. I dont know. This is part of the theme of the book. We need to get more dialogue between the innovators of Silicon Valley and policymakers. Right now they are in separate worlds. As you think about the sectors being disrupted whether its health care or education or energy or transportation or food or this new environment of work thats going to require a dialogue. My guess it will take a few years where there are a lot more people doing it and some basic benefits bundled in based on how many different gigs do you or how many different jobs theres something in there so those people have some benefits. But exactly what is it and how to strike the balance for something thats just emerging now and dont know exactly how it will play out its hard to say but i do think it will become much more important. The whole definition of work is more people. People fundamentally are thinking about this. People are frustrated about it. What is the future is going to be like. What is technology doing. Theres some positive and some negatives. We need to have more of a discussion about that, a dialogue about that as opposed to having these kind of almost warring camps talking past each other. You have a chapter in the book called disrupting america and its interesting to take that entrepreneurial vision and apply it to our own government. What works, what doesnt work, where weve done things well and where we need improvement. We need a lot of improvement in a lot of areas. Government is not very efficient and they need to take some of these models were seeing and figure out morven ways to access things. Much smarter ways to procure. Much smarter way to develop software. Better way to have a dialogue around the right policies. Right now things are very fragmented. We need to reboot america. Government needs to take a fresh look. We need to have more of this dialogue. Not that the government is always wrong and technologists are always right. Theres a balance here. We need to have more of that dialogue and not just these people throwing talking points back and forth. Coming in to this segment we listened to Bernie Sanders about apple. We also talked about how much more expensive ultimately it would be to do that. Right. Has that ship sailed . Can you bring, you think those jobs back . Does the infrastructure the supply chain exist or could it be built and whats the cost and implications of doing that. At the macro level we have seen the globalization of manufacturing, the globalization of capital. Now were seeing the globalization of entrepreneurship. Thats what i talk about in the book. Its largely sailed but starting to see some Companies Take a fresh look at it. Its insource not outsource. In an odd way the use of technology to make things more productive in terms of manufacturing theres fewer jobs. If theres fewer jobs maybe the jobs can be here because labor cost is lower in aggregate. Companies have said first and foremost well focus on jobs. We focused on a company in detroit that started the doe create swobs. He said ill put in detroit what needs jobs. Building stuff in america, building stuff in detroit can make sense. Its a very Successful Company and an example thats focused on profit. Wants to maximize the value to shareholders. But also focused on purpose what people call impact investing. And providing school lunches. They created a couple thousand jobs in communities that needed those jobs. The next generation of entrepreneurs is not just tech or profits but purpose. One of the anxieties is Technology Code is place workers. Ive been told its an argument. Its something i worry about long term. Just last week citigroup came without a report banking business up to now hasnt been disrupted suggesting they are at an uber moment losing jobs. No question. What happens . Wall street journal oped basically said the debate this year on the campaign trail is about these too big to fail banks. The real problem is too big to innovate. All over the country they are chipping away at different aspects of the franchise. Ten years from now the disruption of Financial Services in this third wave wont be coming from the Regulatory Environment imposed coming from the start ups coming up from the bottom. You dont think they will buy them. Some will buy them. Some will basically try to do it themselves. Some will say we want to partner. Some will say we want to acquire. Ate mix. You wont see the dominance of the banks as of ten years ago, dozens hundreds of new players emerging. Companies like facebook that are strong in media didnt exist at the beginning of the second wave. Youtube didnt exist. Things like itunes didnt exist. It will impact important aspects of our lives. Not Just Software and technology but how we do things better in our lives and require more partnerships and engagement with government. One last item. Yahoo . You competed against yahoo for a very long time. I tried to buy them. At one point we offered 2 million. They turned it down. At the time there was only two employees. What grade do you give Marissa Mayer and what price do you think the company is worth to be honest i havent focused on it because ive moved on and focused on things were doing at revolution. Im not an expert. I thought bringing marissa in made sense. They need focus more on product and that engineering mentality add a perspective. Execution hasnt been what people were hoping for. So kind of taking a fresh look at that. It was smart they made that alibaba investment. Where a lot of value of the company is. These Big Companies not just innovating within a company but innovating around your company. Surrounding your company with a network of entrepreneurs. We did a deal with google. Thats now worth more than all of ampol. Who do you think should be the heir apparent or successor to bob iger . I dont know. A lot of people are being talked about. I have to see the candidate list. The trick there is somebody who can marry the sensibilities of hollywood and technology. Steve jobs did that brilliantly with apple because he had one foot in Silicon Valley and one foot in hollywood. Who is the person you most admire right this minute in that sort of tmt . Jeff bezos has done a great job not just in commerce business. Now in the journalism business because he owns the washington post. Space business hes done a great job of scaling something that started selling books like the third wave and turned it into a huge company with lots of businesses. Continues to innovate. Continues to figure out ways to lead into the future. Hes a model executive of the second wave. Well see a whole generation of new entrepreneur and next iconic ceo. Our advertising guy is standing outside. Hell be sending you a bill. From the gridiron to racetrack, joe gibbs is celebrating his 25th year with his nascar team and hell join us next. The 2016 nascar season is under way. Joe gibbs racing, and celebrating its 25th year which is unbelievable on track because coaching joining us now joe gibbs owner of joe gibbs racing, former head coach of the washington redskins. Wish everybody could have careers like that. Great season last season. And are you gratified by whats happening, the progress being made down there, joe . Yeah. I got to tell you, good morning, new york. Hey you guys, yeah. We got a lot going on down here. Can you believe 25 years in racing . I wish i could say i was 25 years as head coach but somehow you get run out of the nfl somewhere in there. I dont think you can make 25 years. I watch coaches and things that happen and that is tough. Theres a reason i think they earn their salary. With a lot of the sports that were watching, joe, it seems like they are in a sweet spot and everything is going great except for concussions in the nfl. But viewership is unbelievable. Final four we know how well that has worked. Whenever the olympics are on thats great. You think there are some things in nascar that need a little bit of tinkering to make it i guess viewer friendly and fan friendly . You know whats happening nascar has done such a great job. What were focused on is the way to present our sport to the public and the way the public and our fan base wants our sport presented to them. I tell you what were doing is social media for us. We are blowing up social media. It is unbelievable. And nascar has done a good job of presenting our sport, i feel like, from a lot of different ways, all the ways that people today with technology are wanting sports presented to them. I think were on the forefront of whats going on there and i think what its doing is driving the popularity of our sport. Obviously our sponsors, we got southeast biggest and best companies in america. And a lot of ways were marketing. We are 38th weekends, we can deliver to a company, six and a naval to seven Million People. From a business standpoint and the Way Companies see us, a lot of the Top Companies in america are investing in nascar and were thrilled with the partners we have. You think about fedex, interstate batteries, mars, coke, toyota. We have the biggest and best right here with us. Joe, there are some people that say maybe supply is exceeding demand right now. Too many races. The races are too long. Too much of the race is televised. At this point the supply actually exceeds the demand and that there needs be some rejiggering and a balance restored. Are you in that camp . I tell you where we are in our sport and were the only sport i think. We have a ten year tv package that we just signed. And you know yourself tv, they dont do something unless they understand the return on their investment. We have a ten year package for us right now and i think that they are helping us direct where our sport is going. When we talk about so many of our fans, our races, i think our nascar has done a good job of listening to our fans and what they want in races. Weve changed our playoff formula for racing and the way we compete now down the stretch to win a championship. Everything from restarts. Weve also talked about races and race length. All of that i think is on the table. Nascar is willing to reshuffle our fan base and to what our fans want. Because of that i do think well stay on the forefront of whats going on with nascar and i see it as a Bright Future for us and thats the reason why you have so many sponsors and Big Companies that are reinvesting with us. I mean our race team itself, weve grown from one car to four. Then we also have three racing on saturday. So our sport is growing. Joe, this is steve case. Im a big fan of yours. Ive lived in the washington, d. C. Area for three decades. Whats the biggest difference between coaching football and coaching or leading in racing, whats the key lesson you learn when you made that transition . I got to tell you thats one of the great questions. Heres what happened to me. I was in football, playing football for 30 years. I was scared to death to do something else. I dont know. Hey, whats nascar going to be like. I step over to nascar and heres what i found. Everything about nascar is exactly like football. People go what . What your talking . In football you got quarterbacks. Over here we got drivers. Same dynamics. Okay. And football you have coaches. They got all football, you have coaches, all the pressure and everything and theyve got their Coaching Staff with them, but a lot of pressure there and high risk. Over here, we have crew chiefs. Exactly the same thing. And heres the deal. Its a team sport. And so what you dealeri ire de are people. Our pit crews, we draft them, sign them, they have longterm contracts, we have weight training here, theyre all of their pit stops are filmed just like in football. And theyre paid bonuses based on that. So when i got into this, i said, oh, my gosh. And every time somebody walks around the corner, they say, youre not going to believe this, i say, yes, i will. Ive already experienced it in football. The two sports are team sports. The only difference is we do have sponsors. Football, basketball, baseball, you play the sport. You dont need sponsors. Heres what i found. Anybody who is good in football would be good in racing. Anybody good in racing would be good in football. I saw Undercover Boss and he was in the pit crew. He was like, whoa. It takes me five minutes to get one tire on. Anyway, joe gibbs, thank you. Perhaps nascar could benefit from a third wave for a Third Wave Movement in the entire sport might be in order. Okay. Okay. Dont say i never did anything for you. Appreciate it. When we come back, jim cramer will join us live from the new york stock exchange. Stick around. Trugreen presents the yardleys. Hello . oh, pizza is here oh yeah, come on in [claps] woah lose the sneakers pal. Kind of a thing. Spring is on. Start your trugreen lawn plan today. Trugreen. Live life outside. On top of your health . Ay ahh. Ahh. Cigna customers have plan choices and tools to take control. So theyre more engaged, with fewer high health risks and lower medical costs. Take control of your health at cigna dot com slash take control. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back, everybody. Lets get down to the new york stock exchange. Jim cramer joins us right now. A huge story. They made it official. The deal is off. I know you all have the ceo Brent Sanders coming up. Theyre all dumping allergan. It was worked like 160 to pfizer. Obviously i think the goalposts were changed in a very nonchalant way by treasury even though they worked together for a very long time to try to find out what the regulations are and address them properly. As joe would say, the government listened and said, hey, listen, were going make our own rule and tough luck. Thats the way it works. Retroactive. Not just these two companies. They may have been in the sight of the government when they set it up. I think what happened is when i interviewed secretary lew in 2014, he said, listen, we cant stop this kind of stuff. It has to come from congress. You know what . Maybe thats the way washington works. Its very hard to run a business when they do that. Were there enough spreads for allergan and they got a little bit. But people got slaughtered. Horrific if you just woke up yesterday. 20 . A lot of people didnt want to wake up. Theyre like, what did i do wrong . They were taking sayre a quill, the best drug for when youre in prison. Thank you, jim. When we return, jim case on the disruption of tomorrow. Well be back in a moment. E trade is all about seizing opportunity. And id like to. Cut. So im gonna take this opportunity to direct. Thank you, well call you. Evening, film noir, smoke, atmosphere. Bob. Youre a young farmhand and e trade is your cow. Milk it. E trade is all about seizing opportunity. When bargain carriers talk about unlimited data they dont talk about all the extra unlimited that comes with it. Like unlimited frustrations when they slow your data after just a gig or two. Or unlimited angry girlfriends. Because of unlimited undelivered explanations. And unlimited searching for. Whatever youre searching for. Stop searching and switch to verizon by calling 1. 800. 870. 8149. To avoid unlimited misunderstandings. Mom mom, whered you go . Maybe, not baby. And what feels like unlimited videos that wont go viral. So if youre done with your unlimited plan limiting you, call 1. 800. 870. 8149 and switch to verizon, americas best and most reliable network. And now get 20 gigs on four lines for eighty dollars a month. Welcome back, everybody. Our guest host this morning steve case with his new book, the third wave. You say companies cant go it alone. You cant focus on what youre doing within the company. Competition is going to be the key. Three ps. Partnership, policy, and perseverance. Revolutionalizing health or food are hard problems. They take out kind of a longer term mentality. It was sort of ten years in the making overnight success and partnerships and policy and perseverance were successful in the first wave. Thats why i tell some of those stories. Congratulations on the book. Again, its called the third wave. We appreciate you being here. Always fun. Thank you. Make sure you join us. Squawk on the street is coming up next. Good wednesday morning. Welcome to squawk on the street. Carl quintanilla along with jim cramer and david