Transcripts For CNBC Squawk Box 20140212

Back toward its longer run objective, the committee will likely reduce the peace of asset purchases in further measured steps at future meetings. There isnt a big move to the markets this morning, but after those gains, youll take a look at u. S. Equity futures this morning and see green arrows once again. Dow futures up by about 16 points. S p futures up by just over 1 points and the nasdaq futures up by about 3 points. More on the markets still to come. But first, the south is in the middle of snow and ice once again. The weather channels alex wallace has the forecast for this mega storm that will be at our front door this time tomorrow morning. Alex. Weve got wide reaching impacts. Right now, weve got the cold air rushing into northern sections of georgia, the carolina and the moisture all meeting up. Thats not a happy marriage for us. Were seeing the reports for us here across north georgia into the carolinas. Freezing rain out there. Weve got several more hours to go of this. This is going to be an event, no doubt about it. Well be talking about for quite some time. Snowfall also something that well be watching for through tomorrow. You get into the north georgia mountains, there will be some spots picking up, 5208 inches getting into the carolinas. A foot to a foot and a half. Wow. And again, on top of that, weve got the icing potential out there, significant icing threat from atlanta to augusta, georgia, into the raleigh area. Were talking about crippling ice situation. Thats going to mean travel could be very difficult and Power Outages. That is also the other concern for us across these areas, as well. It doesnt stop in the south. Were going to be watching this activity spread its way up into the northeast. You can see the zone of purple, generally 5 to 8 inches. Places like d. C. Into the atlanta area. The western suburb of these spots will be getting close to a foot in some of these locals. This is not a storm to mess with. If you dont have to be out there, stay inside. Joe, back to you. And i hear maybe next week we dont know for on sure, but is there something brewing for next tuesday, too . Are you serious . You know, its a winter that just wont end. Well be watching that, too. I wonder. Thank you, alex. But i wonder, guys, whether im so done with it. Its nice. Im dreaming of a white february its great, people love snow. But im wondering, in atlanta now and places like that, now youve got fair warning, will it be a little better this time . Will they get a few things ready to go . Maybe a little bit prosecute. Part of the problem they had the last time was they released everybody at 3 00 so it created a giant traffic jam. But they dont have enough plows and salt. What do we think this is going to do to the economy, though . At some point, its got to three months in a row, youre talking about a quarter the law throw away. It will have an impact, but it will be like a onetime everybody will say onetime. But by the end of the year when you but when you look at the numbers of flights that have been canceling, thousands. At the end of the year, whenever you think the gdp has to be but even if there was an actual slowdown going on, you can say no, its and you can always say its the weather and have an excuse to say no, its not me. Ive been managing through it. In corporate headlines, Procter Gamble is cutting its full year sales and earnings outlook. The change reflects Unfavorable Foreign Exchange rates in venezuela, so among places and the devaluation of currencies in some of the developing markets that we talked about, which was taper induced for a while. Multi nationals, including ford, whirlpool and diageo all cited weakness in a more sober outlook in those once roaring emerging markets. And the earnings reports that they issued last month, its not the first time theyve heard that. And a rare sale of a stake in alibaba values that Chinese Ecommerce Company at around yep, you saw that right. 128 billion. Whoa. The company is expected to go public later this year. It will likely be the worlds biggest listing since facebooks debut. Update me on yahoo and hali ba ba. Yahoo has a huge stake in alibaba. Any gains that weve seen, we know now where it came from . Well, if you look love marissa, it was marissa. If you are less than enamored with marissa, it was alibaba. But yahoo is only a 39 billion company. How much stake do they own. Alibaba . I think its 20 . Do the math. I dont know no, it was much less. Let me give you the exact. I think i might be way over, then. People have suggested that, you know, 20 billion like half of the value of yahoo is alibaba. The other half is the deal they have with cnbc for sharing content, right . The content sharing. Is that worth thats worth close. Close to the same amount. And workers at volkswagens plan youre right, its 24 stake. The stock is under valued. You remember in the internet days, ill trade you 200,000 cash for a 200,000 dog. The other piece of it is you have to remember they probably wont be able to sell their shares immediately. Nobody knows how this is going to work out. But its 128 billion and they get a quarter of it. Yeah. Its a big deal. Volkswagen, theyre kicking off a threeday election in tennessee about whether they want to become union. Phil lebeau is going to have more on this story later in the show. A lot going on in washington today. We should talk about. News from the white house, today is president is signing an executive order to 10. 10 for federal contract workers. He signaled his plans last weekend. Also today, theyre going to release a new analysis laying out an argument for raising the minimum wage. John harwood joins us now. What were you hanging out with the president last night and the president of the france by any chance . Did this who will minimum wage thing, is that how we got here . No steak dinner for me, pal. I was but i was paying attention to the house of representatives, what was raising the debt limits that the markets rb happy about today. Thats a huge piece. I think well be focused more on that ultimately than we will be the minimum wage or is it the other way . Everybody is making the jokes, too, john, that there was a meeting between the capitalist and a socialist in washington, d. C. And then they always make the capitalist hollande and you know, youve heard that one, right . Youve heard hollande is going to head to silicone valley today. Is it . Yeah. But his Approval Rating makes that the president s Approval Rating is probably double what hollandes is. Hollande has a bump with the new girlfriend, right . Not yet. Hes got some problems. Which one . Well, they both have problems. Take it away. Sorry. John, lets go back on the debt limit and what that ultimately what that means to the party and what the republicans have decided to do in all this. Well, its a positive for the Republican Party that john boehner made the decision to simply cut out the game playing and the effort to find some accompaniment. It was simply too complicated. This is something they know they have to do. This is one area where president obama has made a big victory. Its a unique case because its something that Everybody Knows congress has to do. But he said for three years, since 2011 debacle, hes not going to negotiate over that. He hasnt. Hes made it stick and republicans finally went along. And its smart for the Republican Point of view because they want to focus on other issues as john boehner said yesterday we dont want to make ourselves the story this year. This is the year they want to make obamacare the story. You know, the slow economy, the difficult unemployment situation, theyre going to link those two, of course, because of that cbo report. So theres a lot of things that they want to talk about, the debt limit and jittery markets are not one of them. What happens to bring tensions down, john . Because we didnt hear any of the rhetoric going into this from either side. How did that come about . Well, i think the dye was cast on that since last fall. You know, we had the shutdown. That was damaging to republicans. It obscured a story that was going to help republicans, which was the difficulty with the health care rollout. And they just realized that that was counterproductive. So you then had paul ryan striking a deal with patti murray that was an incremental deal. But the idea of calming the fights over money in washington in the near term freed them to make a longer term argument in washington. And the other near term factor was that republicans were not able to pass their own pending bills. What happens was they had dialed the deficit reduction on the discretionary part of the budget so aggressively that their own members werent willing to vote for the bills because they didnt have enough money for them. There was a theoretical determination to cut shortterm spending from that part of the budget, but when it got down to the actual bills that were going to pay for it, like the transportation bill, they werent willing to vote for it. So they had to find a new way of Going Forward and now they found it. Politico is demanding this story that Congress Come up with more money to raise the debt ceiling. What does that mean . The question for senators now, theyre going to pass the debt limit. Do they do it fast or do it slow . They can do it fast if they ever unanimous consent for everybody. Senate rules give people a lot of ability to string things out. Cruz is saying hes going to string things out. Well see whether that sticks. Theres a strong desire by members of the senate to get out of town just like the house is getting out of town. I would expect that its going to pass today and that cruz will make noise and then ultimately back down. But if he chooses to get, he can string it out. You know, theyve got to get 60 votes to bring up the debt limit and then theyve got to get 60 votes to move to final passage. Its a matter of peer pressure, really. Fellow republicans say, hey, you know, knock it off. And cruz has been fairley impervious to peer pressure in the past. Quick question. Where do they come up with the 110, the 1010 is number . I think it has to do with getting inflation adjusted some benchmark. I think it may have been when Ronald Reagan came to town. Because the value of the minimum wage has eroded with inflation, even though its been raised a couple of times in the interim. But i think its to get to a benchmark from a couple decades ago. That would make sense, just the nostalgia of trying to get back to the type of economy we had under reagan. I think thats a good symbolic number. Yeah. You know, they just want to bring back the carter happy days. We many people have said welcome back carter or is it welcome back cotter . Its carteresque. Youre baiting someone again. No, im not baiting anyone. Youre talking about executive orders and this is a serious question. Was welcome back cotter in the 70s or the 80s . I think that was the 80s. Yeah, it was, but theres shirts they put out that say welcome back carter that have a picture of president obama. Its kind of a joke. I was thinking about oh youre missing John Travolta in that role. But you can do whatever you want. The president watt at monta monticello. It was the 70s. Horshack is dead. Recently. Travolta became a huge star like six times back and forth. Who else was in there . Is there anybody else in that show that became super famous . Who . No, didnt and dave caplan. Right. No, but a lot of people still bring it up. Its weird. Its not a bad theme song. No, a pretty good theme song. It was the guy from who, the theme song . Yeah. The theme song is a famous guy. John, while we deal with 70s pop culture yeah, john sebastian. We will thank you with the report from washington. We will talk to you soon. Lets get a check on the markets in the meantime. Were now looking at four days in a row of change. John sebastian. S p futures up by 1. 5. This is coming after major gains the day before. The dow was up 192 points yesterday. Strongest fourday winning streak. Since december 2011 for the s p 500 and the nasdaq. Here is something that weve talked about a lot in the past. If you believe that the bull market is still intact and will be higher at some point in the future, the market doesnt really go on sale. Weve got 16 off on this merchandise. Then it goes to 5. 8 and people are like, im going to wait for 10 and now all of a sudden we were down 2. 8 yesterday. Now were probably down one and change. And im kicking myself. I put money in the kids college funds, but i didnt fully max them out. So now it could go back down ten. But suddenly, you know, the s p is back to 18, 19, 1850 is the high. You had a chance at 1750 and no one did. That was my appointment, a lot of times before you known it, the stock if you try and time the market, remember, the study that said if you try and time the market, its a big change. I thought about what becky is doing which was putting money into the kids you remember last year, you put it all in at the beginning of the year. And i thought, oh, i wish i had done that. You have so much compounding that you can do, you can have millions of dollars. But i just missed out on the 5. 8 . Youve got like 30 years of impounding. Fl very powerful. Im still stuck in the mutual funds world. Time for the Global Markets report where Ross Westgate is standing by in london. Its dif lent to how much main or snow you get. Wait a second. Why are you wearing glasses. Because i had an eye issue this morning. Oh, you do. Yeah. Just to take that precaution, you know. Weve had the wettest winter, joe. In the last 150 years. Interesting. Since 250 years. Oh, 250 years. Which means its been very, very wet. Yes. California is a very dry situation. Last week when we went. And we got 16 degrees and sochi has 60 degrees. Its weird. Its like the climate is different all around the world. Its weird. And snow in atlanta right now. And weve got five foot drifts. Nothing has melted, either. Amazing. Thats why its called winter, i think. And the ice boats are still suck in antarctica. Actually, theyre not. Thanks for that, joe. Look, we are higher on the ftse by around 81 points. The big focus right now has been the bank of england anticipates quarterly inflation report. Theyve had Forward Guidance similar to the fed with an unemployment threshold of around 7 . Were only just a little bit above that. Theyd to change their tune a little bit this morning. Downgraded the inflation forecast, as well. Earl 2017, 2 is their 2 to 3 target range. Base of stronger growth, there is a chance rates could go up in 2014. As a result, sterling picked up quite a bit against the dollar, up well over to 1. 65 on that. But hes gone out of his way to say wait, maybe the equilibrium rate for the unemployment is between 6 and 6. 5 . So this is an example of what happens when a Central Bank Issued a Forward Guidance and gets to the target earlier than it thought. Theyve also said they will keep hold of the stocks until they raise rates. Essentially, growth is better, inflation lower than we thought. A quick mode about italy and spain, by the way, theyre at the lowest yields since weve had since 2006. No one is really worried about any kind of peripheral risk at the moment. Thats where we stand here in europe. Back to you. Thank you for that. Coming up, we have highlights from sochi this morning and then a major favorite doesnt make it to the podium. You can guess who that is. You see him right there. Were going to have the updated medal count in the next half hour. But first, find out what happens with hedge funds ray dalio, dr. Oz and chef mary burtalio. What do they do . Meditation. No, they mediate. They can mediate their meditation. Also, we should say there is a sales tax on lap dances if you did not know. One well known club has found out the hard way and we will talk about that when we return, as well. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. Welcome back, everybody opinion it is time to pay up for backs taxes on lap dances. The judge says the club aloveng the citys west point highway owes over 2 million. She argues the state lap dances dont qualify on dramatic musical performances. She says this is a sexual fantasy, not a musical performance. Who . A judge who is ruling that they have to go ahead and why is that a choreographic dance . She says its sexual in nature. Do you know how hard it is to learn how to do that on a pole . Have you ever tried it . No. Have you . A little bit. Not the fancy moves, but its really hard to i would imagine. Why would this be different if you were a performer in the lion king. Were not showing a lap dance here . No. Because im not familiar with the term. Never heard of that . What . They dont let cameras in the champagne room. What is a stripper . Whats a girl . You wouldnt know about that. Whats an attorney . Well, the clubs attorney counters that the state anticipas tax is unconstitutional. Its a hustler clup club. There arent any magazines left, are there . And isnt everything free you tell me everything is free on the internet. I dont know what youre talking about. I just think it would be hard to run a girly mag at this point. Im going to have to meditate after this segment. Or mediate. The big question this morning, i dont know if it is but well say it is, what do ray dalio, dr. Oz and mary batelli all have in common . You i caught up with all three to talk about something impacting their business, which is the art of meditation. The stress is a actually, it comes from the animal part of your brain. If you calm and realize thats what reality brings you, it brings you things you want and things you dont want the and you have to deal with that reality. The acceptance of reality is something thats much easier with meditation. If you just sit down for a while and be quiet, it really does work. Prayer, it probably works if you can get into that centered place. I have always found permanently that dm helps guidemy in a direction thats more reproducible. Like most people, i struggle with it. I struggle to get into the mindset to do it and then i struggle to do it. Its not like, oh, man, i need a stiff shot of on meditation. It puts you in the place where you dont necessarily theres still a shot, a time in the day when i need a stiff shot of gin or vodka. But i would say its because as bob was saying, its cumulative. And the more you do it, the more you feel different and not different like oh, my god, im interior. Its like, im more in charge of my destiny right now. Im less likely to feel disappoint object anger or anguish. Ive been trying to do meditation. And i always thought it was a classic thing. And then you Start Talking to some really interesting people who are all into it and are into it and think theyve fundamentally changed their life. And the whole thing seems crazy. If you do it through prayer, through a quiet moment for yourself, theres a lot of drnt ways you can find some it goes back thousands of years. Trying with the sound of clapping. Have you been successful . I think i have. Ive been doing it over the past year and a half. How do you know when you get to that place . I do something called tm, which is transdental meditation. That is 20 minutes twice a day. 20 minutes . You have to do it 20 minutes twice a day. I would argue that when you can actually do it, it really does you get into that place. On that panel . Oh, no, you missed it. It was a separate panel we did with arianna and a whole host of doctors the idea of finding 40 minutes in my day, not happening. Nobody with young kids. No, no, they were talking about how they had young kids. Some of the women that were on the other panel, one note on ray dalio, he talked about how they have this Brutal Honesty where theyll sit in these meetings and tell each other how stupid each other are or if theyre, you know, decision is no good. And he says its because of the meditation that theyre all able to have these without killing each other . That theyre able to have these honest conversations. If you had 20 minutes, is it better but 20 minute power nap, is it better than a tm and the answer from all those we talked to last night was yes. I said look, if i had 40 minutes a day to sleep, to go to the gym, to hang out with my kids, when would you prefer to do . So if you give yourself five hours of sleep instead of six, do you think thats the trade . Because theyre showing eight hours of sleep. Theres no way im ever getting eight hours of sleep. Im just telling you what the scientists are doing. There is Scientific Evidence that tm actually changes your sort of brain we have people who have enough im just putting it out there. Perfect for you. Thank you. But i think there are people who are never going to have time. I dont do yoga. I cant touch my toes. Do you still do that downward dog, by the way . Mario claims he meditates while hes driving his vespa on the street. Did you look at downward dog in the dictionary . I will now. When we come back, have worries about a correction left the market . Well have that discussion right after this. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. I didnt think i could buy them their own, let alone for under 300. But this asus with windows is lightweight and has everything they need not like chromebooks that cant install office or have to be connected to the internet to get much done. With this they can do homework, chat, play games on their own laptop, and their own time. So no more fighting. At least not over my laptop. Honestly, i wanna see you be brave fed chair yellen stay the course during her first congressional testimony sparking a rally for stocks. Joining us on set is rich steinberg with signberg Global Investment management. John lonski, moodys Capital Market group chief economist. Thanks for being here this morning. Rich, we did see the markets take off yesterday. Were back to levels close to where we ended the year. What do you think happens now . Inge everybody has to take a deep breath back. The markets try to be binary, right . And its not that simple. So i think now investors have to take a test back to their kind of risk levels and say how did i feel in january . I think were going to do you think the declines that we saw at the beginning of the year were the head fake or do you think this is the head fake coming back up . I think the decline was a necessary head fake. And i think now were going to get back up to our head above water. Were still sticking with the premise that we can see 1930 in the s p by the end of the year. But its going to be lumpy. 1930 by the end of the year, thats not a target in terms of gains from tend of last year. No, but 8 or 9 for where in the High Net Worth space with clients that have a 4 to 5 spend rate is a decent year after the year we came up last year. For me, it would be a win. John, in terms of what yellen said yesterday, it wasnt necessarily that they see great things in the economy as much as they sound like she is going be dovish. Its telling the markets the fed will be there to support it. Shes telling the market shes going to be very sensitive to signs of economic weakness. If it turns out the labor market softens considerably, the fed wont be shy about temporarily haltding its program. Id like to add, too, on the credit front, were doing pretty good. Our high yield default for the states fell 1. 9 in month of january. Thats the lowest for the current recovery. If Corporate Credit is in good shape, profits are growing, i think that provides you with a sound underpinning for equities, although the equity market is not cheap. Its Pretty Amazing that we didnt know we know yet what was new that we found out about yellen yesterday . You just said that shell be very sensitive to weakness in the economy. Thats hurry whole thats what we think of her right now. We think she might be more dovish than bernanke, right . Yeah. What did we find out yesterday that we didnt already know about no question about that. Its hard to understand why the market responded to positively to that testimony. Sometimes its like earnings, when something is left alert, people are waiting to see if there was be some shock factor in the testimony when there wasnt. The natural trend was to put money work because theres no other place to put money to work right now. Even at 2. 7 ten year is not the same, people are losing money in the fixed income. If you talk to some ceos, theyll say, hey, there are some problems. Things are slowing down. Other ceos, no way, very went seen any slowdown. Moderate growth. I think those are the edges you want to apply to the economy this year. I dont think this economy is robust, i dont think its growing briskly. I think this modest growth is going to continue. The gains by payrolls will probably come in less than the 200,000 new jobs per month predicted by the consensus unless theres a surprising pick up in Business Sales. Of late, Business Sales and in the Fourth Quarter were getting results to that have not exactly been going through the roof. Were seeing sales growth of 4 . And that tells me if Companies Want to continue to grow profits, they have to control costs. If they have to control costs, that means they have to proceed cautiously. With hiring and Capital Spending. So were getting close to 6. 5 . Is that a fake unless, a false number . Its a false number. Were looking at a year to year decline by the Unemployment Rate of more than a percentage point. When this happened in the past, we would be looking at real actors, real Consumer Spending growth of 4 . Instead, were looking at real actor tax Income Growth of 2 . So this is people who have dropped out of the markets and arent looking for jobs in part because theyre discouraged . Thats the primary driver of the latest Unemployment Rate on a year to year basis, yes. John, rich, thank you both for coming in. On coming up, were going to talk more about the markets at 7 00 a. M. Eastern. Well see whether this market can continue this way. But first, lets find out what Michelle Caruso cabrera has coming up for us from sochi. Good morning. Hey there, andrew. This next olympics report may feel more like a Weather Report because i dont mean to brag, but its beyond warm. Its almost hot here, approaching 60 degrees. Actually, its over 60 degrees and thats impacting the sports up on the mountain. Well tell you all about it, and the effect of the halfpipe, as well, the downhill. Take a look. Its green as far as the eye can see here at sea level. Were on the Winter Olympics after this break on cnbc. [ male announcer ] right now, love is in the air with the adt valentines day sale. Get adt pulse installation starting at only 49 and show your loved ones just how much you care with the gift of Home Security and home management. Thats an incredible savings of 350 and an incredible feeling knowing you and your loved ones are safe and secure. With adt you get 24 7 Fast Response monitoring that helps protect you from burglary, fire, and high levels of carbon monoxide. Plus, Remote Access to your home when youre not there. Even control your thermostat to help save energy and money. So dont wait. Get adt installed now, and get everyday security starting at just 49. You may even save up to 20 on your home owners insurance. Call 800adt9006 now. This special offer ends february 17th. Welcome back to squawk box. Lets get to Michelle Caruso cabrera in sochi with the medal count including one we didnt get that we all expected. Poor shaun white. Well get to that in a second. Lets show you the medal count. Right now, norway and canada at the very top. 1 1 for norway. Canada has 9 right now. Netherlan netherlands, u. S. And russia, 8, 7 and 7 respectively. Speaking of gold, we didnt get, as you were referring to, andrew, shaun white, the best known athlete in snowboarding, failed to medal last night in the halfpipe event. He had a very bad first run, better second run. But it wasnt good enough. He came in fourth. The halfpipe course extremely controversial this year. When they arrived, they came right away about the vertical grade, saying it wasnt ride. When you see all the errors, including one from shaun white, you can see how many of the athletes continually misjudged where to land. They complained that the bottom, which is supposed to be super smooth was a little more mogul like. Part of the issue is the weather. Temperatures are forecast to rise even more later this week. Its 61 degrees down here. Practice on the womens downhill run was canceled yesterday to preserve the peace. The track was mushy for the nordic event. They brought in some snow stored from last year. It was said its not even slushy, its just mushy. Theres no structure to the snow at all. The sochi olympics chief says theres still no need to use a lot of the emergency snow reserves at the venues. They do have 25,000 cubic feet of snow from previous winters still in storage under thermal blankets. Plus that backup snow making equipment which right now is being used on the nod nordic track. They thought this was a possibility, guys, and it is happening. The question is can they really answer it with all that saved up snow and they claim its going to snow this weekend, as well. Back to you. Hey, michelle, how unusual is this. Terms of the weather patterns there . Well, when the ioc team was asked about it today they dismissed the concerns about it. They said, actually, it was just as bad in vancouver and some of the low level events had issues with snow, as well, there. But this is a subtropical place. Sochi, there are palm trees here. Palm tree res so common here that some of the cell towers are decorated as palm trees to blend in. So in the evening, you know, does the temperature get cold enough so if theyre try to make snow they can . Yeah. It gets in the 30s or in the 20s, as well. They said they havent had to do a lot of snow making yet. But today is going to be the day. This is hot. I dont mean to brag, but its hot. One quick question on shaun white, now that hes lost how much more events does he have and what does this do to his prospects in terms of endorsement deals . Well, you know, hes still extremely well known, right . There was one comment from one of his teammates, maybe a little snide, they said its good that people know in the world that there are other snowboarders besides shaun white. I think this contest is going to be very controversial. Im not sure everybody is going to look at it like it was a fair fight because it was disastrous on the snow last night. Speaking of another kind of sad situation, bob costas had done 157 straight olympic broadcasts. And had to sit it out last night because of the conjunctive idis in his eyes. He had to have matt lauer fill in. He tried to ease the pain by drinking some vodka on the set on other night, but not good enough. You had to sit out out. I attribute bob costass problem to climate change. I do. I think it all seems related to me. It is too bad, though, with when in that Golf Tournament i played, the wind was so great, it was like the half pipe for me. Conditions werent normal. I would have done much you go with that. Im going with that. Michelle, thank you. See you later, guys. Everybody is facing the same thats the hard thing to get around is everybody is facing the same conditions. We have plenty of snow to ship over in my yard if they there are five foot drifts. Nothing has melted from the last ten storms. Coming up, the worlds best are about to face off in sochi. Were going to talk about hockey and hall of famer ken dreiden. Did you know he was the color commentator for the miracle on ice team. You know who the other guy was that was so unbelievable to be there with this miracle on ice who does our sunday night football, al michaels. But ken will join us next. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Here in philadelphia you can access a philly cheesesteak anytime, day or night. Just like you can access geico anytime, day or night. There is only one way to celebrate this unique similarity. Witness the cheesesteak shuffle. Cheesesteak, cheesesteak its the cheesesteak shuffle huh every day, all day, cheesesteak, cheesesteak every night, all night cheesesteak, cheesesteak 9 a. M. Cheesesteak 2 p. M. Cheesesteak 4 a. M. Cheesesteak any time ruh geico. Fifteen minutes could save you fifteen percent or more on car insurance. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. A signature winter Olympic Event kicking off the day. The best of the nhl will represent their countries in hockey. Joining us now is ken dryden, nhl hall of fame goalie and former general manager of the maple leafs. Also the color commentator with al michaels in the historic 1980s miracle on ice game. Somehow my 14yearold daughter who really hasnt done much is playing hockey. Shes learning now to skate backwards, which seems important to me. She says, well, i dont have to play defense. So i havent really been that good. It all goes back to that moment, ken. And i dont even know if you realized it at the time, but we watched kurt russell over and over again playing herb brooks in this fantastic movie. That was such a singular moment in americana that it really well never forget it, and we want to watch every olympics to see how our team does in hockey now. Well, i mean, the u. S. Doesnt isnt the underdog a lot. And certainly not an underdog to the extent that it was. And then as the opponent being the soviet national team, i mean, it was just it was unbelievable. I mean, it really was something that was not possible to happen. And it happened. You know, the players and brooks, and we lost him too early. Jimmy craig and eruzione. Anyway, here we are today. And it doesnt matter that theyre not, like, college kids and non i mean, we still love this because we should have the very best guys playing to represent their country, right . So thats fine, right . That its nhl guys . Oh, absolutely. And i think that i think they will be at their best. Each country now prepares itself very well leading up to the games. Even if the players are involved in their nhl seasons, that they have summer camps. They are involved with the coaches, the general managers speak. So theyre pretty much ready to go. And then with this larger ice surface and it being in russia, i think well see finally the russian team being at its best, which it really hasnt been for the last 20 years or so. So anybody you figure the u. S. Has got a shot. Russias got a shot. Canada has a shot. And then we always think of sweden and finland as well. So anybody can win. I think so. I think so. You know, theyre all good enough to win. Theyre all beatable as well. And its very unlikely this time that the czech republic, who has always been a contender, they seem to have fallen back. But of those other five, it could happen for any one of them. You know, were not talking about the womens teams, but i think, you know, they can skate as well as and better than men sometimes. You dont think of women necessarily checking, but they do that, too. And hockeys just, you know, now that weve got these big tvs with the high def, its changed the whole game, i think. Yeah. And as youre talking about the womens game, i mean, there is not technically bodychecking in womens hockey. It happens, though. Thats right. I mean, mens hockey is a collision game. Womens hockey is a contact game. And the level of play just gets better and better and better all the time. Its really quite terrific, how well they can play. Hey, ken, really quickly, we struggle with pronunciations sometimes around here. And i just wonder, how did you and al michaels how to pronounce all the soviets names when you were calling that game . It was actually fairly easy for us, and for me, i was familiar with the soviet players, having played against them during the 1970s. The hardest was when we were, you know, doing a game with romania. And the names that we had never heard before or seen before or had heard pronunciations of before. And you dont have much time in terms of preparation. The good news is that nobody listening knows the right pronunciation either. Just settle on a name and just go with it. You played since you were a kid. Im a cornellian. I didnt play, but i had season tickets. In 1969. Would you have your kids play these days . Thats a very good question. Yes, i would like them if i knew that conditions for playing were going to improve, then i would encourage my son or daughter to play hockey. If things stay as they are, im not sure. But this game can be played in a way that is just as exciting and challenging without the kind of risk that is currently present. Great meeting you, ken. Thank you. We appreciate your time. Thank you. Nice to meet all of you. Go big red. Cornellian. When we come back, more from the olympics in sochi. Jpmorgans chief equity strategist. He is all business when it comes to the markets. Well get his forecast right after this. Where you think youre gonna go when your times all gone . [ male announcer ] live a full life. The new lexus ct hybrid with an epa estimated 42 mpg. The further you go, the more interesting it gets. Lease the 2014 ct 200h for 299 a month for 27 months. See your lexus dealer. For 299 a month for 27 months. voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. How did edward jones get so big . Let me just put this away. Could you teach our kids that trick . [ male announcer ] by not acting that way. Its how edward jones makes sense of investing. The bulls take the street by storm. Stocks jump after fed chair yellen speaks, and Congress Puts the debt ceiling to a vote. Does that mean the markets will dodge a correction . 1,000 days until decision 2016. There is a long time between now and then, but the big issues are not going away. Job growth, immigration, tax reform, debt threats. Which topics should be front and center for america right now . Another big storm slamming the south. Its being called catastrophic. Were going to have an update. Squawk box begins right now. Good morning, everybody. Welcome back to squawk box here on cnbc. Im becky quick along with joe kernen and andrew ross sorkin. The futures are indicated higher. This comes after four days in a row of gains. Actually, i take that back. We see some red arrows. Dow futures down only by about 15. Thats a reversal of a gain of 15 points earlier. Youve seen a move of about 30 points over the course of the morning. S p futures are lower, down by 1. 7 right now. And the nasdaq off by just over 3 points. The tenyear note is yielding right now 2. 744 . So that yield has moved up. It had been below 2. 7 for the last several days. If you look at some of our headlines this morning, we do have another winter storm on the way as well. The southeast will be getting hit particularly hard with the winter storm warning in effect for alabama, georgia and the carolinas. Plenty of snow and ice in the northeast is on the way as well. Well have an update from the weather channels dave malkoff it just a few minutes. No shortage of chinarelated news this morning. First up, better than expected trade numbers out of china helped Global Markets sentiment this morning. Import growth at sixmonth high. Those numbers were much better than expected. Both the import and the export numbers. And ford is reporting a 53 increase in auto sales in china last month. That comes after a 35 increase in december and a 47 jump in november. Big, big numbers that keep getting put up on the board. Also, ibm chief executive is reported in china trying to mend fences. Reuters reports that she is meeting with government officials in whats being termed a trustbuilding exercise. Shes trying to reverse slumping sales in that country stemming from distrust over claims of u. S. Spying. Andrew, this is what youve been pointing out, issues for companies overseas. Makes it a little harder. Ibm downloaded all our crappy assets to chinese companies, arent they . Lenovo. Lenovos figured out how to do it. I said shed be happy that she was able to offload the stuff they didnt want and get a decent price for it. Still has as well. Thats another one. Do we know how to say her name . Rometty. Rometty. Okay. Also, the house shes a watcher. What . Shes a watcher. Shell let us know. Okay, good. Dont start. The house passed a bill to raise the debt limit without any conditions. It passed by a 221201 margin. Republicans had considered attaching a repeal to cuts to military pensions. The that the is likely to consider the measure today. One of my favorite topics, its now being hit by attacks from unknown computer hackers who are apparently sending mutated lines of code into the program that runs the virtual currency. Are you kidding me . I thought that was supposed to be the thing. Supposed to be hackproof. Theyve made that point. Well see. The Bitcoin Foundation saying the attacks are responsible for problems experienced by two bitcoin exchanges that caused them to temporarily halt withdrawals by customers. The halt causing bitcoin values to drop sharply in recent days. I dont really understand how the malicious code works, but theres all sorts of people i thought it was a denial of service attack. That was i think on the exchanges. Then there were these huge i dont know if you saw the story in iceland. People are building these massive computer vaults, basically, that are mining this stuff. So you know how you need all this computational power. And so now theyre building anywhere its cold so you dont have to to cool the servers . Because you need massive servers to mine the digitally mine. A couple other bitcoin pieces of news. New yorks financial regulator revealing new details on how the state plans to govern virtual currencies. He expects to adopt consumer disloescher rules, Capital Requirements and a framework for permissible investments with consumer money. The rules could make new york the first state to regulate bitcoin. And i would think that would be very good nude for bitcoin. Because on the one side, youve got attacks coming in. But if you have regulators who come in, that gives it legitimacy to some extent. Folks like jpmorgan and others. I think its weird our dynamic with bitcoin. Youre fascinated. I dont have any, but im fascinated. You had a chance. Maybe thats why. But i should be the one that is, like, rooting for it, i think. Singulairity . No. Because you dont because the Federal Reserve cant damage the dollar is sort of under assault because we have to assume the Federal Reserve will be prudent in managing the dollar. Once you go off the gold standard, you have to hope that theres sensible people in charge but you dont know whos in charge. Libertarians want bitcoin because its not tied to an irresponsible government. But you dont know whos running it. Its new Technology Like the things you wear on your wrist and its uber. I dont like any change at all, you know. Thats why but were on opposite sides. I should be the bitcoin promoter. So we have to okay. Im a meeting of the minds on that one. Lets bring in our guest host for the next hour, tom lee who we talk about a lot. Hes the chief u. S. Equity strategist at jpmorgan because hindsight is always so perfect in the market. Toms been unabashedly bullish for four years, but, you know, the market was going up for four years, and anybody could have done that. Even though all the people that think theyre smart and that during that period, theyre all, the entire time, saying oh, well, i dont know. And they never get called on it. You know, we assume that it was easy to do what you did, but we give you kudos because you did stay, when times were dicey, you never did change. Yeah. And how much are we up in four years . More than doubled. Yeah, probably more than double. Now, the question now is and its something ive been kicking around if this is going to continue, and we need the economy to cooperate, but if were in a period where people start generationally coming back to the stock market, this could be a secular bull that were in. And we may not be in the ninth inning right now. And if thats true, we may never get a 10 correction because stocks dont necessarily go on sale to let people get in, do they . Joe, i would agree with you. I think in a lot of ways this could only be the middle innings of what could be one of the longest bull markets in history. I mean, obviously, you know, we cant predict how long this is going to last, but i see plenty of reasons why the market could still advance double digits from here. For several years. And im still getting things like be scared of years that end in 7. And it was 87, 2007, and then if you add another 7, its 2014. For some reason, the stock market always traces the 1929 pattern. People send in to me all the time, you know, they overlay the recent stock market. Is it because markets that go up, you can overlay them on one another, and it always looks like 1929 . Im still getting this stuff. And mark faber says financial assets, theres going to be an 80 haircut for these things. Its good to have all this talk still. You dont see that. You know, there have been several fairly welldocumented books about sort of what the climate was like in the 20s, late 20s. And were just not theres no parallel yet. You know, were not in a golden age. Oh, its much warmer now, the climate, we know that. Thats right. We could be building servers in new york city now. The weather. Is it moving up, the warmth, or down . Whats atlanta doing . Its weird. It seems to be going im not a weather guy. When yellen testified yesterday, was there anything that was surprising that caused the 200 points, or was it just a snapback . And then ive got one more question. Yeah. I was actually talking to a trader yesterday. They told us the tone of the market changed since last thursday. And what had happened was there has been a buyers strike for three weeks. All of a sudden starting thursday, we got the hedge funds coming back in. Everyone had been waiting for something. I think everybody felt uncomfortably long. I think yesterday was a reminder that even if were transitioning to a new central bank, sort of chief, weve got a lot of continuity. And i think that comforted markets. Continuity in terms of having both the hot and cold water on full bore for accommodation. And then finally, this is the key issue. Are we in a year right now that is going to be characterized by what weve seen so far, and that is kind of a consolidation of the last three or four years which might still be healthy. It could take off in 2015 after consolidating all year, or could this end up being a similar year to 2013 . Do we need to consolidate . Will we go above 1850 on the s p and stay there, or are we going to be turning around all year . You know, when we look back at last year, about half the market had a tough time until march. And may. So, you know, as much as people look back and say the s p went straight up last year, it was really a year that started off as utilities and defensives led, and then all of a sudden we switched in march to a traditional bull market. We were worried about another spring swoon, i think, last year. Correct. Thats right. So maybe this is turning out to be the same way. Im still very optimistic this is a doubledigit year for the s p. Double digit. Its much easier to say high single digits. As a person in the business, i would recommend you say that from now on. You might actually go out on a limb and be right, but for job security, its better to say high single digits. Maybe i should say triple digits. No, im still, you know, i pray for those three years in the mid90s that that happens again. And given the attitude by most people, theres still a whole generation thats like this isnt for me. The stock market. And there are others that are never coming back. And then there are other people who have never get in and theyll get in. Well induce them to get in, but its going to take a lot more. Thats right, the psychology will need to change, but there is a lot of firepower to feel this rally. Theres a lot of cash on the sidelines. Consumers have delevered. Nothings better than having money that in three years doubles instead of money that goes up 2 a year. To have your money working for you instead of you working for your money. I wonder whether you need two two generations . Two of those to get everybody to come back because i think theres a whole generation that saw a nice threeyear period. If they come back, though, do they get left holding the bag . When you finally come back after three years of gains, is that the wrong time to be jumping in . It depends on what level and where the multiples are. But i think the s ps going to be much higher three years from now. So i think theres still plenty of time to get in. Good. All right. Tom will be with us for the rest of the show. Stick around. Andrew has a bitcoin story. Well also talk about the weather. Weather woes in the south. Ice and snow slamming into georgia and the carolinas as we speak. Well have a live report from atlanta as the storm starts to make its way north. And find out who took home the best in show last night. Wasnt that a great movie . What a movie. Also as we head to a break, check out the price of crude this morning. Squawk box will be right back. Turned a little bit the wrong direction but not too bad just yet. The dow looks like it would open down about 40 points. The nasdaq would be off a little more than a point and the s p 500 almost a point as well. Making headlines, deere reporting better than expected quarterly results. Ernlings beating the street by 29 cents a share. Demand held up, and the company ceo notes that efforts to hold the line also helped results. A fire fox terrier named sky has won best in show at the Westminster Kennel Club dog show in new york. This win makes it the 14th time that a wire fox terrier has won the competition. That is more than any other breed since westminster started. Almost unfair to all the other breeds. He looks like an old man. You know who he looks looic . Who . Like one of the early president s like garfield or something. Are you sure thats a dog . A weird looking dog. They are. He looks like an old man. You know there are dog lovers who hate you for saying that. I love dogs. I have three dogs. They wont let them in best in show yet. Its a weird, you know, the whole idea of a purebred you get these agitated dogs. In general in breeding . Purebred humans are bad. Right. Thats what happened with the royals in europe, remember . They all got hemophilia. Yeah, you dont want to do the purebred. He looks like a nice guy. It is a good dog, im sure. Yeah. We love the dog show. Snow and ice slamming the south this morning. Lets get to the weather channels dave malkoff who is standing by in atlanta. And in the old day, dave, youd be standing down there and you wouldnt know whats coming. Its weird to know everything thats going to happen in advance. People are laughing at you if you said theres a bunch of snow and ice coming. Reporter yeah, technology, right . And it is changing the weather down here. This is not what you expect in hotlanta. Just two weeks ago, you guys, weapon awe were all standing in davos, switzerland, and it was way warmer there than it is here. In the alps, it was warmer. And look whats happening right now. Weve got a mix of sleet and rain coming on the roadways here just ten minutes outside of downtown atlanta. And look at that. If youve ever stopped by the 7eleven and got a slurpee, thats kind of what you got on the roadway right now. But look at this. Nobodys out here. This is the middle of the day or it would be normally the beginning of the work day. But since the word got out, everybody has stayed home. That means businesses, that means schools, that means state and local governments, they are all closed today. So its a huge impact on the Business World as well. And truckers are being asked to avoid atlanta. So right now people are staying off the roadways. But as it ices over, its going to be very, very cold. A lot different here than it was in davos, you guys, right . Theres nothing like a 16hour traffic jam where you dont move to teach people. Im not going out today at all. And it should be different this time. How long is that supposed to last . Will they be able to go to work tomorrow, or are they looking at a couple of days of staying home . Reporter you know whats happening . Weve got this storm. Then weve got another one coming right after it. So the same thing thats happening overnight tonight is going to happen again tomorrow night. And as this storm pushes up, were going to go right through washington, d. C. , and all the way up the eastern seaboard. Think about ten or ten inches to a foot of snow in washington, d. C. , maybe. You know, dave with that shovel, you know, the people in atlanta, the sanitation department, you may get everybody out of there. So its all going to work out. Nice to see you. Reporter here i go. Nice to see you without the caviar from davos. Coming up, the threat of snow not going to slow down fashion week in new york. This is big. Nicole millers cofounder and ceo will give you the pulse of the consumer in this middle of this very deep freeze. I dont know if they do overcoats. Well talk about that when we come right back. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box. New york city fashion week is in full swing, and our next guest runs a retail powerhouse thats right in the middle of all the action. Lets get his take on the business of branding the pulse of the consumer in the state of Luxury Retail at large. Joining us is bud conheim, the cofounder and ceo of Nicole Miller. Youre not wearing a Nicole Miller tie, though. I just want to be clear. Yes, we make them under license now, but no, im not wearing a Nicole Miller tie because we actually were so successful in the tie business doing iconoclast ties, things that up the corporation, individual, blah, blah, blah, throw away all the tradition ties. Thats why were so big. We ended up encouraging casual fridays because once they said up the corporation with these crazy ties, then it was up to the corporation with everything else. Wear a jacket, sweaters to work. And so we ruined our own tie business. Look at him. The sweater with the bow tie. That will work for you. It looks better on him. Let me tell you, this works because its weird. Thats weird . Exactly. You look like a weird in waiting. Thank you. Thank you. Maybe not in waiting. Maybe not in waiting. State of the luxury buyer right now in the world of retail. Right. Is what . Well, if they have money, theyre into luxury. If they dont have money, theyre not into luxury. First of all, i dont use those terms, luxury or anything else. People ask me, whats the profile of your customer . I say someone with a credit card that clears. Thats our customer, okay. And everybody puts labels on this thing because its so easy to think of things when you just have a big label on luxury. A guy that wants to buy something and its a stretch, its not a luxury buyer. If its a stretch, he has to reach to pay for it. But if hes emotional enough and he has to get it and his wife is ragging on him, he goes out and gets it. Youre not helping the administration along in its efforts i wasnt going there. You really werent . No. You hate this income equality. These are bad people buying this stuff. Can we just admit that . Wait, wait, wait. Wait. I rest my case. As far as there are people buying the luxury stuff. What is it that we make that anybody needs . Nothing. Weve got a country that the Poverty Level is wealth in 99 of the rest of the world. And so were talking about how woe is me, woe is us, woe is this. Our 99 are the 1 in the rest of the world. The figure is even bigger than that. I agree. Thank you. So here we are incredibly wealthy. Nobody really exactly. And here it is, money is all over the place. And the guy thats making oh, my god, hes making 35,000 a year. Why dont you try that out in india or some countries we cant even name, china, anyplace, the guy is wealthy. And so here its a relative its a luxury. Youre throwing around luxury because youre a kid. Youre on television and you know, whatever. Thank you, bud. Can you guest host . Awesome. We invited him on . But let me ask you this, though. How is the consumer feeling these days . Lets say versus a year ago, versus two. Okay. Im worried about one consumer. The person that comes in to buy our stuff. But generally to answer the question seriously, which i think this show is supposed to be no. Dont worry about that part. Deep down we are. Honestly, is there a little bit 2013, we were on a roll. We had 11 increase for the year which was kind of surprising because i didnt think it was out there, but it was. And we go into 2014, and all of a sudden somebody pulled the rug out. Its not what it was. Its not and we make a product that nobody needs, but its so emotional. That it doesnt really matter whats going on. We can always be successful because were making styles. And were all marginal. The biggest guy, lets say, is ralph lauren with billions or whatever. Hes marginal. In the big picture, hes a tiny little percent. What do you make of all the discounting going on in the business . And amazon, trying to get into this business. 30 seconds. Of fashion. Amazon is in this business. Amazon is read his book, the everything store. Amazon is in every business you can name. Theyre incredible. Theyre leading the way to discounts and theyre setting the tone, if anybody pays regular price, they have to be crazy. So what we do is you guys have probably went to business school. Youve heard of this thing supply and demand . This kind of a theory. Weve got to roll. Weve got to come back. Weve got to have you come back. This was awesome. We do love your sweater. Next, stormy weather. Okay. Im out of here . In for washington but not before oh, look that the. He changed clothes. Not before some business gets done. Well be right back. What is this place . Where are we . This is where we bring together the Fastest Internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. Tv and internet together like never before. Welcome back to squawk box, everyone. In our headlines this morning, Mortgage Applications fell 2 last week. Thats according to the Mortgage Bankers association. Both new home purchase applications and refinancings were down during the week. The average 30year Mortgage Rate was virtually unchanged at 4. 45 . Toyota is recalling 1. 9 million of its prius hybrids to deal with a software glitch. The problem could cause the vehicle to stall. 713,000 of the affected cars are here in north america. No accidents or injuries have been reported related to this problem. The recalled vehicles were manufactured in 2009 and later. So youre driving a car that looks like that and it has glitches . Whoa thats cold. I mean, it looks like a cheese wedge and youve got mechanical problems. But you feel good about yourself. You can tell your friends youre green. Especially when its stalling. Youre not harming the environment either. Amazon. Com is hiring more than 2500 new fulltime workers. The jobs are at Fulfillment Centers in virginia, kansas, south carolina, Washington State and tennessee. The retail giant is expected to make a formal announcement later today. The house has voted to increase the treasurys Borrowing Authority until march 2015 with the senate expected to consider the debt ceiling today. Ed rendell is the former govern esc governor of pennsylvania, jim nussle, thank you both for being here. Governor rendell, lets start with you. Morning. What happened yesterday, and what does this mean in terms of what we can expect in congress and in washington . Well, john boehner found out fairly clearly that he cant pass a debt ceiling bill with any conditions on it because there are enough republicans in his caucus who will never vote to raise the debt ceiling, period. So he did the only thing he could to avoid a political disaster. What it means Going Forward is that at least for a while, debt ceiling votes are not going to be controversial anymore. Is it good news for the republicans, though, that they put this issue behind them . Theres been a school of thought among some republicans that this is exactly what they needed to do if they expect to win more seats in the november elections. Absolutely. Im astounded that some republican groups are attacking boehner and saying that he should have opposed this and done this and this. It would have been a disaster. The American People spoke pretty clearly last fall. They dont want hijinks with stuff like this. They dont want political games, and boehner avoided a disaster, particularly when things looked so good for republicans going into the 2014 cycle. I think they dodged a bullet. Hey, jim, if you look at what this means from the budget perspective, obviously youre not going to get some big changes, but it also means that congress is working, theyre willing to sit down. How do you read it . Well, i would agree with ed that this is good news from the standpoint of avoiding a fiscal meltdown or a debt meltdown right now. But the bad news is that there is not an adult conversation going on about our fiscal policy in this country. Whether youre a debt scold, as ive been called, or whether youre somebody who believes that we just could spend ourselves to prosperity, regardless of what side youre on, until both sides come and sit together and figure out how were going to deal with not only the fact that were at 74 of gdp right now, debttogdp ratio, but that over the next ten years as the cbo director yesterday said, its going up by yet another 10 basis points, were in a big situation that requires adult decisionmakers, people who are willing to do more than just the shortterm gain of a midterm election. And while ed and i both have been in politics, we know that that might be unrealistic. What the alternative will be is a crisis that we wont be able to avoid, and it will be an economic meltdown for the country, which will be a disaster that politicians will be held accountable for. Jim, you are a numbers guy, though. This is argument thats a little tougher to make when youre looking at tax receipts going up, when youre looking at a lot of the problems we thought we were facing a year or two ago, kind of fading into the background. Run me through the numbers. What are the real issues here, and what needs to be taken on . Well, the cbo director did a good job of that yesterday. Theres no question that weve made a shortterm improvement of our fiscal situation. Deficits have come down by almost half. Thats all good news. But if you look in the out years and whats happening particularly in health care, Health Care Spending in the entitlements, medicare, medicaid, those programs are eating us alive from the inside out. And politicians heretofor have not been willing to sit down and make any changes, have any kind of discussion about this. Theyre avoiding it. And you can avoid it for a while, and you can win a couple of elections, and thats all fine and good, but every day that goes by that you dont address it, the hole gets bigger. And it becomes more difficult to get out of it. And small changes now is whats needed in order to deal with that. And they werent able to make that yesterday, clearly. Hey, ed, governor rendell, i always like checking in with you on 2014 and 2016. You know, you stuck with hillary, and im not sure that made you the most popular person in the current white house. I mean, thats going to happen in 2016. Who do you think shes going to be running against . Well, its really hard to say right now, particularly with governor christie having the problems that are confronting him. I think if jeb bush really had the fire in his belly, he could go for it, and i think he could win. I think hes the type of republican that would be very difficult in a general election because he has great appeal to hispanic voters, and hes shown his ability to work across party lines. I dont know whether jeb really wants to do it and get into the fray. If you eliminate jeb bush and say for the moment that Chris Christie is not going to be a factor, who is there . Its like going back to the clown show before during the 2012 primaries. Rand paul, the best he could do was attack bill clinton. Is he crazy . Attacking the most popular person in america . I mean, once you get by jeb bush and governor christie, its hard to find a republican who could pose a serious challenge in the fall. Dont we have to do it just so that theres another president ial election between a bush and a clinton . I mean, dont we just just so that that on the ballot. I mean, weve got to do it, dont we . Well, chelsea said that hillary would be a better president than bill, and maybe jeb would be a better president than george. So it might be the right clinton and the right bush. Ed, are you worried that hillary is crowding out other people in advance . Am i worried about it . No, not really. First of all, its nothing that she is doing. I mean, shes not out there promoting herself. Shes doing the right thing, i think. Nussles laughing. Shes doing the right thing or, you know, her allies are doing it. But when you see a poll on democratic voters that 73 for hillary to 12 for the nearest competitor, 61point edge, it makes it difficult for anybody to mount a campaign. Youre going to go to donors and say, well, im only 61 points behind. Nussle has sort of a i dont know what to call you now. Someone just wrote in, i dont know, as a middle of the road as a newage republican, do you view that setup as two republicans running against each other compared to what we have now, or do you really think hillary would that be i mean, its certainly two people much closer to the center of things than where we are now, dont you think . Well, ed certainly knows, and i do, too, what its like to sit on the sidelines and not be running quite yet. Oh, yes, this was not about me. Hillary is not running yet, and shes not doing anything. Oh, of course not. Of course, she is. And thats fine. Shes doing a great job of clearing the field. But i wouldnt discount christie or jeb bush yet. I think it would be a mistake. I think what Chris Christie did yesterday was demonstrate how if he can and certainly theres some bumps in the road here that are going to have to be cleared before we know for sure. But he did a great job yesterday of framing an issue that heretofor the democrats have pretty much controlled. And i think youre going to see Chris Christie continue to emerge as a stronger candidate, together with bush and a whole host of other republicans. All right. Governor rendell, jim, great to see you both. Well see you again soon. Good to see you, becky. Still to come, stocks rallying on Janet Yellens comments yesterday. Guest host lee will tell us whats going to move the markets at the opening bell. Up next, an update from the olympics from sochi. Michelle carusocabrera joins us with a preview. Shaun white lost last night. Thats the bad news. But plenty of good news to report from team usa from sochi. All those details coming up right after the break. [ male announcer ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Were open to it. So i can reach ally bank 24 7, but there ar24 7. Branches . Im sorry, im just really reluctant to try new things. Really . Whats wrong with trying new things . Look mommys new vacuum cat screech you feel that in your muscles . I do. Drink water. Its a long story. Well, not having branches lets us give you great rates and service. Id like that. A new way to bank. A better way to save. Ally bank. Your money needs an ally. Welcome back to squawk box. Take a look at futures after what was a very good day yesterday, things are looking down, not horribly down just yet, dow jones looks like it would open down about 17 points off. Nasdaq off about 3. 5 points and the s p 500 off about 2 points. It is day seven of the Winter Olympics. Cnbc chief International Correspondent Michelle Carusocabrera joins us live from sochi, russia, with more on the news and the highlights. Michelle, there has been plenty to watch. Reporter yeah, there are absolutely, becky. Lets get you up to date on the medal count. Norway is in the number one spot. They have 11 medals followed by canada with 9, netherlands, 8, u. S. And russia tied for 7. Norway and canada both have four golds each. All right, big headline is the big disappointment last night for the most recognizable athlete in snowboarding. Maybe the entire Winter Olympics. Shaun white. He wanted to be the First American man to win the same event at three winter games. Made several mistakes in his first run last night in the halfpipe. His second run was much better, but it was only good enough to get him to fourth place. Instead switzerlands podladtchikov took the gold. A messy event. The majority of the athletes falling. Snowboarders have been complaining about the quality of the course, the vertical grade they said wasnt good. Mogullike snow on the bottom. But heres the good news. Threetime olympian erin hamlin. New york won the bronze in the singles luge. Its historic because she becomes the First American man or woman to win an individual olympic luge medal. God, such a scary event. Look at that, right . American devin logan of vermont won the silver medal in the womens freestyle skiing slopestyle event. Remember all the slopestyle events are new this year at the olympics, requires the athletes to navigate rails and things like that either on skis or snowboards. There look at that. Whoo dont you love watching this stuff. Its just been amazing. We feel lucky when were here to see all this stuff because we can actually watch it live in our headquarters. Big ticket last night, pairs freestyle figure skating was the ticket to get last night. The russians, Tatiana Volosozhar and Maksim Trankov completely dominating the event with the highest Short Program score in olympic history. And this is a huge deal for the russians because listen to this statistic. They won the gold medal in this event at every single olympics. From 1966 to 2006. Then they were completely shut out last time in vancouver. So tonight, the couple performs again in the long program. Its not just about them winning. Its about redemption for the entire country when it comes to this event. Which brings us to tonights highlights beyond the pairs figure skating. Fourtime olympic medalist shani davis of the u. S. Competes in the 100meter speed skating mens. Womens downhill tonight. I dont want to spoil this, if you go on google, you can see the outcome, but there is a very exciting outcome when it comes to the downhill. Theres a tie, believe it or not. Very rare in olympic history. Womens halfpipe in snowboarding. Well see whether or not the snow conditions are any better there. And then the luge doubles as well. Remember, you can watch on cnbc tonight curling, as always, from 5 00 to 8 00 p. M. During the Winter Olympics. Lady and gent, back to you. How do you get a tie . Dont they time it out to, like,. 2 of a second . Reporter apparently thats how close they were, exactly, i know. Amazing, right . Yeah. Reporter i bet youve already googled it, becky. I know you. I havent. I like to wait. I dont want to get spoiled. I like to wait to see what happens, but thats a good tease to make me watch it. Reporter yes, it is. All right, cool. Thank you. See you again soon. Michelle carusocabrera. When we come back, where should you put your money to work . Tom lee will share his investment ideas. Take a look at the futures. Right now down about 14 points. Weve seen a range of 30 from up 15 to down 15. Squawk box will be right back. What is this place . Where are we . This is where we bring together the Fastest Internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future we must have encountered a temporal vortex. Further analytics are necessary. Beam us up. Thats my phone. Hey. [ female announcer ] the x1 entertainment operating system, only from xfinity. Tv and internet together like never before. Welcome back. Lets get some investment ideas with tom lee, chief u. S. Equity strategist at jpmorgan. So if we missed this last little go around, we had a little dip opportunity, whats the strategy now . Well, you know, i think what Everyone Needs to keep in mind is the market started the year at a much higher level anyway. So if youre buying today, youre buying it cheaper than it was a month ago, and youre buying stocks still where they were around december. Weve been talking about emerging markets, and youve argued that things are priced really low. At a discount. Thats right. I think companies in the u. S. That have emerging markets exposure trade at nearly the largest discount in ten years. But i should not go out or should i go out and buy a mutual fund that just gives me exposure and focuses on emerging Market Companies . I think thats not a bad way for someone to try to someone t exposure to emerging markets. Its much better than trying to buy single stocks. But what you get if you buy a u. S. Company with emerging markets exposure is you get both the kicker of an emerging markets story, but also the weapon f benefit of the u. S. Accelerates. Would you touch europe right now . I think europe is improving. I still think the blue chip market is the u. S. Also u. S. Equity strategist. It almost is kremerging from what looked like when you have 50 youth unemployment or whatever it was, its frightening. Its hard to tell the difference if you just look at numbers. Almost looks like yi merging market. So if they just get back to some semblance of the way it used to be in europe, that might be good, too. Why tech . I think, one, tech is a bunch of Blue Chip Companies with great balance sheets. A large legacy tech. And i think the investment environment for Capital Spending will improve and that is a really big tail wind for tech. You mean ibm, oracle . Yes, the traditional ibm has stumbled recently. Do you think they just come back and that they can win back some clients . Well are and so i wont talk about ibm specifically, but ill talk about how, you know, hedge funds and port it follow i dont managers look at tech. Traditionally when a tech company stumbles, its almost too late. But in recent years we found many examples of companies reviving. So i think the play book has changed. Im assuming you dont include names like apple in that . It might be because if you look at the multiples, you might actually consider that not part of this whole social media class of stocks that has done very well. The social media piece, how do you feel about the social media piece, whether thats overvalued . Twitter for example. It reminds me of when you look at biotech and phrma. You never really had to say you owned biotech or phrma. You really needed to own both. And the story of biotech has strength th strern strengthened becauseentiation i product. So i think people what do you think about the recent spade of all the ipos that is coming . Does it make sense to you . Would you want a piece of that . Again, i cant talk about specific issues, but he gives you this look like i want to hear about financials. You would buy wells fargo, jpmorgan, citigroup . Of course he would buy jpmorgan. I think Money Center Banks again have a real competitive advantage. When you think about sophistication, cleanness of the balance sheet. American Money Center Banks are globally so you would buy financials . Credit Card Companies . Yes, all the above. Because they have a lot of leverage to an accelerating investment environment in the u. S. Which is really one of our backdrops for this year. And as rates do you think rates are going up . I think its not going to rise in a way that is unconfident about for equities. But i think it makes sense but does it help banks eventually . Yes, net interest margins should improve if rates go up. But you think when will we get to 3. 5 on a ten year . Our fixed income team believes well see that level this year. Really . Yeah. Thank you for being here. Thanks for having me. A great hour. It was a lot of fun. Hes one of our favorites. He is one of our favorites. And i say that genuinely. Thanks. Take a look at futures. Based on what tom has been saying, i dont know, you can be blamed for this . Five points . It got better. Plus 15, down 15. We started talking, it was down 15, now only down 6. Tom, youre doing your job. Tom, thank you. Dow looks like it would open down 6, nasdaq off 2, s p 500 off 2, as well. Deere reporting better than expected quarterly results. Earnings beating the street by 29 cents a share. Demand held up and the company ceo notes efforts to hold the line on costs helped results. Also a wire fox terrier was named the best in show at the westminster couple Club Dog Show in new york city. The win makes it the 14th im that a wire fox terrier has won. This one is named sky. But more than any other breed since westminster started, its been this breed. Why . Those are the dogs that stand and point so straight. Their noses go straight out. They have a very nice backbone. I feel bad for the other breeds. I feel bad for the mutt sflt. Theyre not even allowed to com complete. Maybe they feel slighted. I think they know way more than we all expect. Mutts appreciate when you bring them home. I dont think they have designer dogs in there either. Labradoodles or things like that. Now they cost as much but theyre a mix. A mutt is a mixed breed. Yeah, but all those breeds were mixed from things in the past. Fachncy mut its . If you came from a foreign planet and you saw all the different dogs, you would have no idea that they were all dogs. Youd position they were all different animals. Did you ever think about that . Especially the hairless ones. Hairless chihuahua and 7foot great dane you and you say those are the same thing. No, theyre not. You know carls dog. He has a very cute dog. You would think that dog was related to the rat. Thats one of the lowest members of the food chain. Probably replaced by the rat. Carl is coming on in a few minutes. But that is much closer to a rodent than my german shepherd. Im telling you. Anyway thank you, tom. Im egging on carl all the way from sochi, hell hear that im dissing lucky. Lucky is a sweet dog. My dog takes a crap bigger than carls dog. Nice thought. Coming up, what do you think that 7foot tall great dane does . That thing you need a caterpillar equipment guy to come in and help with that. He has to take the dog out before the ducks come out because if it chases a duck, she complaint stop it. I read that. Barry knapp and jack ablin will join us and head back to sochi for an update. Tall the building is, or how ornate the halls are. It doesnt matter if there are granite statues, or big mahogany desks. When working with an investment firm, whats really important is whether the people behind the desks actually stand behind what they say. Introducing the schwab accountability guarantee. If youre not happy with one of our participating Investment Advisory services, well refund your program fee from the previous quarter. Its no guarantee against loss and other fees and expenses may still apply. Chuck vo standing by your word, thats what matters the most. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. Gelling with yellen. It will remain contingent on its yut lo outlook for the labor market. A break town of yesterdays testimony, Market Reaction and what investor shoes take away from her first grilling on the hill. Volkswagen workers voting on whether to let the union in. And another winter storm will create chaos today in the south. The northeast bracing for another big storm, as well. Jim cantore brings us the lat t latest. Final hour of squawk box beginning right now. Welcome back to squawk box here on cnbc. You would be with my daughter on channel like 3 on sirius xm. In the new york area, i grew up with move on z 100 and i say that unabashed. See, im the neighborhood. Im a hoodlum. First in Business Worldwide. Do you love to wplj . No, i have sirius xh. John is and tom in the morning . No, i dont listen to deejays. I listen to jazz other than if theyre saying please acceptsen money. Id rather here a commercial. Futures down ten. So well have to get the stock market open to see what it really wants to do today. A great day yesterday as we opened gelling with yellen. The asian markets are responding probably to what we did yesterday. And we would think the euros are. Stronger than expected import numbers and stronger than expected export numbers. And there is the euro markets. The dax i think did well yesterday, too. Up again today. Andrew has some corporate news. Check out shares of deere. Getting a boost in early tragd. Earnings beating the street at 29 cents a chair. Ceo notes efforts to hold the line on costs also helped results. And take a look at dow chemical. Dow chemical rejecting investor downloads call to split the company in two. Dow says it has studied the idea and decided it would not be productive. And Owens Corning topping expectations, the Company Announcing it plans for pay its first dividend in 14 years. Our other top story today, another winter storm is on the way. In fact almost a third of the u. S. Population lives in area that is are under some form of Winter Weather advisory right now. That is about 93 Million People. The southeast will be getting hit particularly hard. There is plenty of snow and ice in the northeast that is on the way, as well. Flight aware is reporting that more than 2500 cancellations have already happened. Well be getting an update from jim cantore in just about 20 minutes. And no surprises i guess youd say about yesterday from janet yellen and her testimony to congress on tuesday. The markets seemed to like that. Up about 200 points. Surging higher on the day. What could possibly derail this euphoria . Joining us is barry knapp at barclays in new york. Trying to remember where he is on these markets. And jack abli this. Executive havent chief Investment Officer at a private bank in chicago. And i would say, ablin, you were a guest host on squawk box do you think it was 18 years ago, 15 years ago . Youve been around. When i just started out. Youve had a Long Association with the show. And we look forward to hearing you coming up. Barry, last year you kind of got bearish a little too soon. I dont know. Did you come back in by the end of the year to catch the last six months . Where were you and where do you stand now . We thought that what would happen if growth surprised on the up side is it became clear the middle of the year that it would do, that the fed would react to it and that would slow the advance. On september 19th, a day after they took a pass on tapering, we bumped or price target by a couple hundred points and figured the market would race. You switched. You did. Unfortunately, only time republicans quote cains. Where are you right now . Were the at 1900 for the year. And the general trajectory we expected was that period of adjustment to fed normalizing policy this we expected to happen in the Fourth Quarter of last year we think will happen in the first part of this year. And then well end the year strong, probably rallying through the midterm elections. So we still think that were in that period of adjustment to policy normalization. I look at yellens testimony yesterday and say we got a nice rally in the equity market, extending the four day move, which was really off what i suppose you could describe as a very oversold condition when volatility spiked to quite high levels as of a week ago monday. But the thing that really troubled me a little bet about yesterday and epg will continue as worth watching is not the ten year part of the treasury curve, its the five year part of the curve. And that is the part of the curve if you look at how the market is pricing out fed rate hikes, once they get started, not so much the timing of the first one, but once they get started, market only expects them to go one percent per year. They always go much more fast. So i think that part of the curve is vulnerable. S p closed at 1850. Youre looking for 1900. So youre generously giving me a 2. 7 return in the stock market, which if youre right, okay. Im glad you told me. But that is kind of, i dont know that is kind of mealy mouth. What do you think, 2. 7 all were looking at this year . Im still calling for about 7. 5 return this year. Started the year overvalued. What . Price to sales ratio traded nearly 20 Percentage Points above its median. Doesnt mean it can stay there, but it needs some help. It needs the economy to accelerate. We need revenues and earnings to keep pace with current expectations. And i expected that we would get the acceleration and unfortunately speaking to you from the especially epicenter, the weather has impacted the economy around here. So im hopeful as weather warm up, the economy warms up. But we will need helpweather hay around here. So im hopeful as weather warm up, the economy warms up. But we will need helphas impact here. So im hopeful as weather warm up, the economy warms up. But we will need help from revenue and earnings to keep the pace going. Jim paulson said we go First Quarter or we ended the Fourth Quarter at a 14 gain in earnings year over year. But it accelerated through the year and your point was that well catch up with where the valuations are right now. Is that what you think, ablin, that maybe it if things do improve, that the underpinnings to where the market is right now, we got work to do just to get up to where that is and from there maybe we could go higher . Yeah, we kahn death erded from fundamentals probably mid year last year as everyone became enamored with quantitative easing and for the right reasons. There was a lot of liquidity around. But now as that moves away, we need something to sink our teeth into and it certainly wont be federal liquidity. Im with jack. But youre both worry warts. Europe is better, china is coming back, the debt ceiling has been raised, the at the time is still accommodative. All the things you worried about, they have all been sort of settled positively. But this is at the core of why the market surged through the second half of last year. Jack hit it. Let me address europe for a second. Europe is trading at a 15 , 20 discount to the u. S. A lot of good things happening, but we will need something. Our belief in europe and we are investing there and weve moved more there, but it is predicated on some kind of policy action, either aggressive,. Japan has been gone for 20 years and we even have that doing it. Barry, last word. Sure. I think that the issue on europe really is just that they will probably get a stronger profit cycle. Most of the people i talk to like it for this year, but longer term, agree with your previous guest tom lee that u. S. Is still the blue chip market in the world. I like that hear that. So were exceptional. I know people in belgium think theyre exceptional. People in france think theyre exceptional. Ive heard that. I dont like that. But anyway, gentlemen, appreciate it. Coming up, the south bracing for another round of bad weather. The northeast in a deep freeze and expecting another round of snow. Well talk about what that means to the economy. Meanwhile, its the opposite in sochi. Carl will have a preview of what is coming up. You yeah, well talk about what joe said about my dog for sure. Its cold where you are. 60 degrees once again here in sochi. Well talk about what that is doing to conditions on the mountain. And what shaun white is saying about whether hell compete in south korea in 2018 when squawk box continues live from sochi. [ male announcer ] we dont just certify our preowned vehicles. We inspect, analyze, and recondition each one, until its nothing short of a genuine certified preowned mercedesbenz for the next new owner. [ car alarm chirps ] hurry in to the mercedesbenz certified preowned sales event. Visit today for exceptional offers. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Welcome back to squawk box. Futures are looking a little lower. Dow would open off about 6, nasdaq a little over a point and s p 500 off about a point and a half. Were talking about big coin aga bitcoin being hit by a tax for sending mutated lines of code into the program that runs the virtual currency. The Bitcoin Foundation says problems experienced caused them to temporarily halt withdrawals by customers. The halt causing bitcoin values to drop sharply. You can see that chart. You had a chance at what price . 5. I didnt know. I was having dinner with a guy. He said you know about this thing called bitcoin . Did he offer you you some . No, he said he just bought some. He said ill sell you some of mine. You thought he was selling you you i thought the whole thing was craziness. I didnt understand what was happening. Like 1,000 worth . How much would it be worth now, like millions . No, not millions. We were just looking at it, 533. 5 to 1200 would be a return of 200 times. All right. Lets get to sochi for an update on the Winter Olympics. Carl quintanilla joining us. But for our entire relationship, we have gone back and forth about lucky. The handsome chihuahua. I have a little dog, i have a maltapoo in addition to a better man shepherd. And watching that dynamic, i dont know what would help there, although theyre both actually its at this point. But small dogs are much smarter normally than big dogs. I love that you have a dog in the city. You didnt cop out. Hes trying to make nice. Andrew didnt have anything. A cat is like having a plant. Its funny, you made that comment, joe, before the break. And now people are tweeting back to the show pictures of, quote, real dogs. So you need to defend the small dog because youre a fan of them, as well. I am. I am. I just said if you came from a different planet, karl, and you looked at westminster dog show, an alien would say look at all these different animals. And if you said theyre all dogs, a guy would say you need new names. People say there is a conspiracy against terriers. I think he looks like a former president. The beard and everything else. Did you fall ski something why would you fall skiing since you went to school with me in well talk about how icy the snow is a little later on this morning. Ill show you some pictures in a minute. But i know michelle has brought you you up to speed on shaun whites disappointment from last night. Probably the best known athlete at lease Olympic Games a least on team usa. He does finish fourth in the half pipe. Fails to medal. This morning on the today show, matt lauer asked him if he thought he might compete in south korea in 2018. And he said i think so. So maybe the game is not over for shaun white. But clearly a let down for team usa. Does make you you would der about some of the other events on the feel like bode miller. He finishes eighth in the mens down hill, but hes not done. He had the fastest training run in the super combined. Of course hes the defending Gold Medalist in that event. That is coming up for him on friday and he is going for a record sixth alpine medal. The big story today, a marquee match up in womens hockey, can that today versus u. S. Both are guaranteed spots in the semi, butt winner gets a higher seed on monday. Canada of course the defending Gold Medalist there vancouver. Although they do theyre riding a four straight losing streak to the u. S. Medal count goes like this. Norway is on fire again with 12 medals. Canada 9. Netherlands 8 chlt u. S. And russia with 7. Germany has six, but five of those are gold, guys. So keep that in mind. Finally, we always like to try to keep it stock specific on this show. So i thought we could talk a little pepsi. I did not know this, theyre not an official sponsor of the games. That is coke. But outside, they are everywhere. Pepsi is the biggest food and Beverage Company in russia, 5 billion in sales per year. Russia is their second large ers market after united states. So i brought you guys, these are carrier flavored lays potato chips. These are crab. Crab flavored lays. Which one should i try . Caviar. I was afraid you were going to say that. The groesest one. We saw these at a market over the weekend. Get a shot of vodka next to you just in case. Hell need some vodka. How is it going . Give us a little flavor. You have to eat four like you you did four shots the other day. You did the today show taste test there. He does that really well. Did you spit that out . You spit it out. Wi heard you you might have tried to compete in one of the downhill events yesterday . Exactly. There has been so much discussion about the snow, and its so warm. So we decided to go up to the mountain where there is public skiing. A lot of europeans, not that many americans, and joe, you know as an expert skier yourself, when its icy, it is tough. So we made our way down some pretty intermediate runs. Im from colorado, not a great skier. Obviously i have pretty bad form there. But, yeah, i think this is where wipe out i have so much to talk about that here. Watching that, the only htime ive gotten air ever close to that was when i was on the chair lift. But i saw what you did there. And the thing that shocks me with these guys on these slopes like that, theyre per pep dick cuellar. And the feeling of staying perpendicular and over your skis, its impobl. Because youre falling. Which you have to. Okay, we get it, i fell. But you did this, you agreed to do this in front of cameras. He didnt know that was going to happen. But thats Pretty Amazing. You could tell from how far you went after the fall, that was a sleep slope you were on. You want to be the pilot or the passenger on your skis. And you turn into the passenger just temporarily. Who was your cameraman on that . Because that was pretty good to be able to do that. Bill angiluchi had a camera hand held, was skiing backward, putting it between his legs. He was better going backwards than i was Going Forwards. Like the guy with the g parachutes. Beautiful day. So you need some had sharp edges, too, on that. But i thought you looked pretty good, carl. And we both are boulder grads. So ill do a little next month. Next month at the greatest you can have sochi, just give e mme beaver creek. You know that. I know. And you get the pizza and frisco on the way up. Carl, they are rushing us out. But we have time for you to fry one more chip. Gosh, i think actually i heard a wrap. Try the crab. Pepsi better love me for this by the way. Does it come with one of those little combs . You can handle four vodka, but not a crab chip. Well check back in with carl a little later. When we on back, an update on where the storm will hit and how it could affect your travel. Those Little Things still get you. Cialis tadalafil for daily use helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. 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Reported Fourth Quarter earnings of 1. 81 a share. Also saw better than expected revenue in a weak market. Owens corning earning 17 cents above estimates. It was helped by return to profitability for its insulation business and also announced First Quarterly dividend in 14 years. And then there is dr. Pepper, snap he will also beating estimates. It earned 97 cents per share. He estimates. It earned 97 cents per share. Says its benefitting from wider distribution of its products. Sorry, we were laughing during the break. We were . I just need to breathe. We were laughing and we were afraid. What could happen with your eyebrows. I have to get myself a comb. Tensions are rising in chattanooga, tennessee as vo workers have voting whether they want to be represented by a union. Its bad weather in chat new gao, but the vote is slowly watched. About 1500 workers at the voks w volkswagen plant will be casting votes. We found a couple to explain why they will be voting to be represented by the uaw. We will have an opportunity to voice our concerns and the continuings that we hope to improve the company. And i think that will work better for us and the current system. Right now as the way i understand it is we dont have a seat at the global works table. And we need to have chattanooga there. We need to be there to raise our happened and say, hey, we need another car here, bring to chattanooga, were ready. House significant would it be if the uaw were to organize this plant . The high for uaw membership back in 1979 at 1. 5 million. The low as plants in north america were closed down by the big three dropped as low as 355,000. It has come back a little bit over the last couple of years. Keep in mind the uaw has not organized a nonbig three plant since the 1970s. That mean there is have been 14 plants opened by foreign automakers since then, most in the south. The last foreign brand uaw plant was a volkswagen plant in pennsylvania, closed down in 1987. Opponents of whether or not this plant is organized say its pretty clear they think that unionization at this plant would be a step in the wrong direction. I believe it will be beat. It can be beaten. The challenge is of course that obama is in chattanooga. Because his nlrb appointees are the ones setting the rules which disenfranchise the workers of chattanoo chattanooga. Take a look at shares of volkswagen versus General Motors and ford over the last year. Just pointing this out, guy. And i understand were talking about global automakers. Its not a reflection of sales or production here only because clearly volkswagen only has one plant here in the u. S. Coming up later today on the closin closing bell, an interview with bob king, president of the united autoworkers, on a day which begins a very low men tuesday election for the uaw. 14 foreign automakers have opened plants since the early 1980s here in the u. S. And for the First Time Since that has started, the uaw has a chance to organize one of those plants. Joining us now to talk about this is a labor professor at the university of california berkeley. Good morning to you. Good morning. So help us understand this. Lets start with this. Do you believe the uaw in its modern incarnation, lets say the last 10, 20 years, has been helpful or hurtful not to the automakers, but actually to the employees . I think its been very helpful to both, i think the uaw has south to build more competitive companies, and also to benefit its members. And in fact its that combination that resulted in a period of real groelt and economic success and the growth of the middle class after world war ii. So i get that argument p until about 20 years ago. I have tougher time with that argument given gm needed our help because they had taken on way too much in terms of benefits that had been pushed on, in part because of the power of the unions. I think the power of the union was very much overstated in terms of gms collapse, chryslerse to the tott aring. Ford made 6 billion in the last four years of the 1990s. A lot of money in that period. With the same union, the same benefit package, et cetera. It had the market gauged correctly. So a lot of things wepts into the bankruptcy. And there has been a tendency to demonize the unions and i think that is overstated. Professor, i understand trade unions and the uaw say net positive probably overall for definitely for the people that are in the union. Maybe not so much to people that would be willing to work that arent in the union. Sometimes i think that is not great. I just wondered about your feeling on public unions and whether you think that for a long time therewerent public unions and even liberals said that should they ever happen because there is no one really there protecting the taxpayer. Public union raises money, laegts tlaeg elects the people they want to control who pace them and it seems incestuous. You think its a net positive for public union sths. I do. Some have a pro upattitude, shall critical, but unions are a vital part of any democratic society. And to exclude unions in the Public Sector in effect equates us with communist poland at a time when all unions were bad with the notion that everything was opened by the Public Sector. So i think to have unions as the corner stone of a democratic society, which in fact they are, george schultz, former secretary of state and secretary of labor, was very clear about that when he said the checks and balances of democracy, ups play a very vital role. I want to bring phil into the conversation, but on the public union side, and were going a little off topic, but should public unions also be able to donate for politicians . I do. Because again that is part of democracy. Does it get messy sometimes . Yes. But i think on balance it gives us the checks and balances. We have a huge upsurge of Corporate Funding into politics given the Citizens United decision. We have to say is that nondistorting . And if that is distorting, you want a bit of balance in the political lets get to phil. I assume youre against Citizens United decision. Becomes an interesting debate. Phil, jump in. Harley, a quick question. Assuming the uaw is successful in organizing and representing this plant in chattanooga, tennessee, there are a lot of people who are saying this is the foothold from here, they will be able to organize the other southern auto plants represented by the foreign automakers. Do you actually think that will happen or is it more likely that this is a one off, they will be successful here, but we shouldnt expect to happen at the nissan or toyota plants south of the Mason Dixon Line . I think this is going to be a very important model. There is a lot of attention on it. And whats at stake here isnt simply a unionized plant, but a new way for u. S. Firms to compete in the Global Economy with Works Councils and a union as part of the competitive success not in spite of the union or the works council. So in that sense i think we could women see a successful k volkswagen and if thats the case, i think youd look at other automakers in the south perhaps moving down in road. Then i think about the decline in private sector union and nothing happens in a vacuum obviously. But Civil Service laws, i dont no one really compares our working conditions to dickens at this point for public or private employees. If it was so essential, why have so many people chosen not to join up, why has it dropped if it was so essential some. Its about 6. 6 of the private sector down from 40, right . Some. Its about 6. 6 of the private sector down from 40, right . Ome. Its about 6. 6 of the private sector down from 40, right . Me. Its about 6. 6 of the private sector down from 40, right . E. Its about 6. 6 of the private sector down from 40, right . Its about 6. 6 of the private sector down from 40, right . Down from 35 . So a huge drop over the last 50 or 60 years. But in part that reflect a lot of pressures well i dont understand the control of unions. The Global Economy. Very fierce employer opposition that has gloen over the years. And laws that have tilted the Playing Field to make it very difficult to organize in practice. We have the right on the books, the National Labor relations act passed in the mid 1930s, but to actually exercise that right effectively in most cases becomes very, very difficult. So i think its those pressures that have been part of the decline of unions. Okay. Professor, thank you for joining us. Thank you. An interesting conversation. Becky. The markets gelling with yellen yesterday. Her first testimony taken in stride by investors. But what did we really learn about the new fed chair . Steve liesman has that story. And yellen will be back again tomorrow speaking to the other of congress. [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Sfwloon kre mental cuts will continue. For more on what we learned, were joined by steve liesman. Yesterday didnt seem to say anything that profound, but the markets obviously liked it. Between she say anything in a that that people think it would take less weakness to stop the tapering . Double negatives in there. Less weakness that the numbers wouldnt need to be so incredibly like a lot of people say it would take a high bar to stop taper. That was the impression i got. So she didnt lower the bar at all. I dont feel like the bar was lowered. If we were sitting there on monday and i asked you is there a sense of some risk in the market right now that tomorrow, tuesday, yellen is going to blow it or show herself to be weak or dramatically change policy . Because one explanation for why the market good well yesterday is that risk came off the table. But do you think people felt the risk on monday . I dont think people believe she would err by making a hawkish err. They shothought she was more dovish. I think if there was anything that would indicate she would be less accommodative than bernanke, that would scare the markets. They love this money. Can i tell you that our cnbc survey we did october, december, january, each time weve asked our participants, their sense of how dovish yellen is has come down relative to bernanke. Is that good or bad for the markets . You tell me. They think now shes more like bernanke than they thought back in october. But she made three decisions yesterday. One she decided the first time the fed chair has spoken that the emerging market blowup was no big deal. Second thing she decided is shes unconcerned about the softness in the data and she has time to wait. And then the third thing she decided was what joe started talking about, this notion of what would it take to pause the tapering and gave us as bit of a a change in the markets. I threw it out on twitter. Most people thought it was neutral. So i dont think that metric has changed. I have to go with xt plan thath explanation i came up with yesterday, there was a risk yellen would be different. That risk went away and the market was ready to buy into this thing. Yellen said there is a green light, lets go and do it. Explaining why you you had a 192 point move on what i think joe correctly says was not a whole lot of news. Historically when a new fed chair comes in, they say the market has sort of uncertain rough patch within six months. Do you think we just had that patch . Traditionally does it happen at the beginning, six months later . Anybody know . As much as i say she made three decisions, she really hasnt made anything big. That was the 4 of what happened yesterday or the 10 . The 90 was the same decisions that had already been made by bernanke. That may come true when there is a substantial change in the drought lo outlook or something changes on the ground. Or the market tests yellen. There is a change, the market moves in a certain way, wants to see how the chairman will react and then you have the big move. Going to be fun. It is. People want some tape of me skiing to compare to carls. So would you say that again . I was looking through here to try to pick out a thats okay, joe. You can go back and ill watch it when we get home. You can fall like that . No, i didnt fall, but you this is on the womens downhill course at beaver creek. Im going to get dean to cut this and well do them both tomorrow. Put them on the same slope. Carl was definitely on a sle steep slope, too. Coming up, the latest on another winter storm gripping the south. Jim cantore will join us next. Hes the guy you go to. Like cramer almost. Cramer on what investors will be watching as we head toward the opening bell. An expert ford technician knows your cars Health Depends on a full, complete checkup. The works. Because when it comes to feeling safe behind the wheel, going the distance and saving at the pump you want it all. Get our multipoint inspection with a a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup. Only at your ford dealer. voseeker of the sublime. Ro. You can separate runway ridiculousness. From fashion that flies off the shelves. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. And only national is ranked highest in car rental Customer Satisfaction by j. D. Power. natalie ooooh, i like your style. vo so do we, business pro. So do we. Go national. Go like a pro. Anbe a name and not a number . Tor scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back. Up on 18 inches of snow headed to the northeast. The south dealing with that deep freeze. Right now we have someone on the ground right there, jim cantore, the one and only from augusta this morning. The knees have been on the ground. And speaking of on the ground weve got sleet falling right now which is a great thing because what we dont want is this the freezing rain that came later about a quarter to a half inch. That accumulates on the trees. Thats the major cause of power loss. That and the wind which is supposed to follow this could be, of course, catastrophic for this area. You look at these hollies here are seeing all this ice accumulate on them. But once the sleet comes it starts bouncing off. So if we can stay all sleet in augusta thats a good thing. We use up most of our moisture here because the models were predicting 2 inches of liquid and what we were looking at yesterday suggested it would we all freezing rain. And cold air is more dense, doesnt get forecast as well and so were into the sleet. Thats a good thing. Right here river walk in augusta, you can see the Savannah River across, the Savannah River, of course, is south carolina. One thinking in eight weeks well half this wonderful little Golf Tournament out here called the masters but whats interesting a lot of people have been asking me, jim, whats the deal if they start losing trees and trees start coming down all over the place . They are so selfsustained at Augusta National they can literally go in and replace a 100yearold magnolia tree in 24 hours. You went know if its missing if theres certainly a tournament. Dont be worried at all about Augusta National. You can see the sleet accumulating on the river walk. Its the same case out on the streets in augusta. The freezing rain earlier did its job on the flag. Even though we have breezes in the background, the flag not moving at all due to the fact that its frozen to the pole in through here. Augusta shut down because of freezing rain. Many areas across the South Atlanta all the way to columbia, south carolina, dealing with snow and sleet at the present time. But this is a good thing, the deeper the cold air gets and the more sleet and snow element we get the less in terms of Power Outages that well get because earlier they were talking about maybe 500,000 to a Million People without power, with this sleet that may not be the case. Lets cross our fingers, guys, back to you. Jim cantore at augusta. I thought he was at augusta, but then he referenced it anyway. No ones out there today anyway, im sure of that. Anyway, lets get down to the New York Stock Exchange and jim cramer joins us now. All right, jim, yesterday i remember you said i didnt know about monday, finally ending up seven i thought it put a pretty good stand in and my question was has it already has the market already said if you didnt buy at down 57 we aint letting you in, were not letting you buy stocks on sale and all of a sudden were up 200 points. Do you think youll get another chance at some point . Some remarkable things happened in the last 24 hours. We talked about yellen staring the course, a lot of people liked that, a lot of people including me were worried about the debt ceiling. Last weekend i was on a chat with David Gregory and he asked whether wall street was being too cavalier given the fact this could happen. You get the debt ceiling which is remarkable the lack of discord between republicans and democrats and yellen saying a lot of things that make people feel good and suddenly you get interpretations of quarters like dr pepper, people love it. Owens corning, its a pretty good quarter, and people are crazy for it. And people say yellens good and were not going to have a government shutdown, 24 hours an amalez izele numbe l amazeing things happen. Is it a year where we get up here and we go or is it going to be we get through the close from last year and then we actually start making, you know, even if its choppy, if its above 1850, i wonder if thats where we spend the year or whether we spend it just trying to consolidate last year . You had david darst on yesterday and he was amazing, he basically said the next level will be dependent on china. If china comes back strong, if the baltic freight goes up from 1,000 to 1,200 and we get it to 1,500, if we start seeing the Chinese Market the last three days, well blow through because china is the key market. Not talking about turkey or argentina, we are talking about turkey from the point of view well, do you know what, maybe that wasnt so bad. Italian bond rates ten year, 3. 66. You think our rates are going to go through china. Italian market third biggest bend market. A lot of things have happened but if china gets better well have a hard time staying down. We cant watch you this week, can we . What, for mad money . Yeah. No. No. We got sports. We got to watch you on squawk on the street and right now. But i know that you youre not feeling bad because curling is i mean, its only two weeks, right, or whatever it is . Its pretty cool to watch, isnt it on cnbc . Are you gladly giving up your time . I love the olympics. I know. Ive always loved the olympics. Ive been riveted to the olympics since the 1964 summer olympics which, remember, was, you know, carlos. It was the, you know, the racial protest. Yeah. Which was amazing as someone who was a 4. 40 runner and it is was a great speakout for people who have been disenfranchised, but, no, i love the olympics, so i dont know. Youre torn. Plus carl is there. Michelles there. Carls there. And so, im seeing carl because the stuff hes seeing is so eye opening its a joy and i think the fact that the games are in russia. I remember when jimmy carter canceled the olympics. I remember that. Did he do anything right . It was about afghanistan. At least thats all squared away and settled now what goes on in that country. Anyway, thanks, jim. Thank you. See you later. Oh, up next you. Do you know theres a sales tax . You know, this is where the public has to rise up and take a stand here. But theres a sales tax thanks. Sales tax on lap dances. Once well known wow. The hustler club has found out the hard way. More squawk box next. Could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Im going to play this straight i decided. Go for it. Go for it. A judge has a message for new yorks famed hustler club. Whats that . Its time to pay up for back taxes on back taxes. Whats hustler club . Its a club along new yorks west side highway. Its kind of like what do they do there . Its kind of like on the sopranos its the badabing place. Its 2. 1 million because the judge argues the strip club that lap dances dont qualify for a sales Tax Exemption on what is called dramatic choreographic or musical performances so basically saying you need to pay taxes. They are not choreographic. Its in the eye of the beholder so to speak. What happens if they choreograph in advance . She calls it a sexual fantasy, not a so it doesnt and the clubs attorneys counter that the states tax law is unconstitutional because its based on the content of the performances. None of us like treating women as objects. Thank you, guys. Its time for squawk on the street. Good morning. And welcome to squawk on the street. Im david faber with jim cramer. We are live from the New York Stock Exchange. Carl, of course, continues to report from sochi. Were going to hear from him later in the hour. All right, lets start you off with a look at futures, of course, after yesterdays very big move up a good day if you were long the market certainly making up a lot of the losses that we saw earlier in 2014. You