the dow futures are up 23 points above fair value. the s&p futures are up by 2.5 points and the nasdaq is up 5.5 points. as for the markets in europe, you can see things are decidedly worse with the cac down .70%. the dax in germany is down .60 and the ftse is off .30%. in the meantime, the russian micex indicated slightly higher trading higher this morning, but this comes after steep drops over recent weeks because of what was building up in the situation in ukraine. and the dollar at this point, at least in the morning, you'll see this stronger across the board. euro trading at 137.73. and the yen is at 102.456789 andrew, over to you. we have big business news with apple tv a little closer to actually happening. apple now reportedly in talks with nbc universal parent comcast about a streaming television service that would allow apple to bypass congestion on the web. the wall street journal reporting that discussions are in the early stage and there are many hurdles to cross before a definitive agreement could be reached. according to the report, apple looking for special treatment from comcast delivery system to bypass congestion. apple has been in talks for a faster tv set with time warner cable that recently agreed to be acquired by comcast. netflix agreed last month to pay comcast for faster speeds throwing open the possibility that more content companies will have to shell out for better service. take a look at shares of comcast right now. you're looking at 49.95. that's coming down a little bit. at one point it was over $54. take a look at apple shares, $5.38 to 5.39. they are talking about using the management delivery service, the service you are seeing now if you are watching comcast at home, that's a different wire effectively than the internet wire. so it will avoid buffering. we have some other cloud news, if you will. cisco systems plans to offer cloud-computing services now. the wall street journal saying the tech giant will spend about a billion dollars over the next few years to enter a market currently led by the world's biggest online retailer. of course, that's amazon. cisco would spend that money to build data centers to help run cisco cloud services. cisco wants to take advantage of increasing corporate demand for renting computing services rather than buying them and maintaining their own machines. there is a man who is back at the table. joe kernan. >> i'm confused, andrew, you need to help me with the apple thing. apple is calling up about five, they are the ones who benefit, but their market cap is $475 billion. and comcast is, like, $130 billion. i just -- i don't know. i don't understand what -- >> which part can i help you with? >> it seems like comcast has a lot of market cap appreciation to be gained over time. whereas any company that gets almost a half a trillion in the past has had trouble, we've never had a trillion-dollar company. there will be one some day. maybe apple is it. >> the question is how much apple ultimately shares with comcast. if looking through that article, one of the things apple wants to do, i'm not trying to bypass comcast because they are part of the deal, but they are trying to bypass comcast in terms of how it gets and relates to the customer. for example, use your apple i.d. then you wouldn't go through comcast. you would buy the device at an apple store. there's some kind of margin compression, i would think. >> what does that mean, comcast is effectively a frenemy at that point? you're competing and -- >> comcast is a partner, but effectively -- comcast becomes the pipe. >> comcast is the pipe that strips off all the additional stuff that they would normally be selling. in some way, you are a competitor, right? i decide to buy from comcast or buy apple being serviced by comcast -- >> well, i think you'll either get it through comcast or get it through an apple store. either way. it's sort of like verizon using apple phones. >> but the pipe is already existing to my house, right? if i'm going to be doing it, i would be a comcast customer already, potentially. >> but the idea also would be -- >> you are not going to get new customers. >> the idea is it would open up the market. if you think about comcast over the past couple years, just in the past year, comcast gaped new subscribers to the video service. this would add much more to the video service or extensively that's the thinking. all the cord-cutters could come back on with the additional marge for comcast and apple to gain. that's the concept. >> i can't get comcast right now at my house. the pipes don't exist there. i have my choice between cable vision and veryize up fios, so i'm not going to be a new customer for comcast. >> you are out of luck until fios or cable vision creates the same deal. >> that's what i mean. if comcast is taking all its existing customers and potentially cannibalizing them by bifing them to apple, they would still be serving them -- >> that's the question, the margin compression on current customers. >> i was reading, and i didn't read a lot trying to catch up, but people said apple needs to do something soon. because the bloom is off the rose on the latest -- >> the information launched yesterday while you were out, but beerends says the stock could be up 20% based on the bigger screen. >> march madness is out and you looked at beerends? you might be the only person that is still -- i saw they had some -- >> i have information now that is useful to you. b beerends says they are up 20%. >> i saw the cover. >> you did read it. >> i saw it said another subjective list of blah, blah, blah. >> there's only one list. >> you can click through on things. >> there's only one list called the top 25. >> the other lists are just, you know -- >> they are wanna be imitators that are meaningless. that's the list. all right. the justice department is looking into whether gm had or hid an ignition switch defect when it filed for bankruptcy. if it knew it back in 2009. "the new york times" reporting that the feds want to determine if gm committed bankruptcy fraud by not disclosing the problem. and whether the company understated the defect when it was talking to federal safety regulators. gm says it is cooperating fully with authorities on several points. i did actually read a lot, and i got the journal every day and had to read it all on the plane, i was going back to read this stuff that happened. >> doing your homework? >> it is much easier to predict what's going to happen when i'm reading it and it's already -- i already new all that stuff, but homer jenkins, the cafe standards caused a lot of these companies -- they have to make smaller cars, like cobalt for the mix, they were afraid to do any type of recall to screw that up because they have to sell so many trucks just to subsidize these crappy little cars that they are trying to sell that don't make any money. >> once the trucks -- >> but there's a government influence, there's a government -- >> i was complaining about this last night because toyota, we ended up buying a sienna. it's a 7-passenger car. >> it's a minivan. you're driving a minivan? >> yes, you knew that. but the option was, you can get and eighth seat to go between the two captain chairs in the middle and make it a ben ch seat to fit eight people in it. that only comes if you don't get all-wheel drive. and i think it has something to do with the weight of the all-wheel drive and that chair. and i think it's the same reason, because the cafe standards that you can't get -- i wanted the eight chars and all-wheel drive, you can't have both. >> did we ever figure out with the toyota, was it a floor mat that caused -- >> it sounds like it. >> you saw the transportation secretary imply that there was some weird software glitch causing it to happen. when, in fact, unfortunately when people get older, they do mistake -- sometimes they mess one the accelerator versus brake, that causes a lot of accidents, but there was never a smoking gun. it was a floor mat. >> eric holder came out to say the biggest problem was the company was not cooperating and was trying to cover stuff up. that's why the massive fine came along with it they agreed to pay. >> welcome back. where were you? and why aren't you on the show? >> he's supposed to come on. >> well -- you still want to come on all the time. you know what? we are just going to black rock him constantly then. but he doesn't care anymore. >> he doesn't care. >> there you go. your hair got long while you were gone. it looks good. >> no kidding. people think i was skiing, but i was getting a new system. it takes time for the plugs to heal and the scabs. >> i like your hair long. >> you like my hair long? i'm like samson, thank you. the rogaine, the entire time i was covered with foam. the entire time you think people are skiing but i was getting work done. >> those twitter pictures, those were old. >> your eyebrows today are manly. i mean, seriously, if i had those things -- >> they are getting thick her? >> no, but it looks like you are thinking a lot to me. which you do, don't you? i have something for you that i want to talk to you about in a minute. i don't know whether you read your own paper over the next block we'll do that. >> china is demanding answers from the u.s. following reports that the nsa infiltrated the servers of huawei. those reports came from the new york times this weekend citing documents leaked by edward snowden. the documents showed what the nsa obtained sensitive data and monitored communications of huawei executives. this operation was designed to uncover connections between huawei and the chinese people's liberation army and exploit the company's technology and conduct surveillance through networks sold to other nations. >> i've got a lot to talk about, but internet security could be one of the topics on the table when president obama meets with the chinese president. and the president arriving in the netherlands earlier today on his way to participate in the nuclear securities summit. in the evening the president is going to attend the g7 leaders meeting on the situation in ukraine. apparently the president congratulated the dutch on their speed skating. and he said he really loved han franker and tulips. those were the things the president could come up with that he knows about holland, but john harwood is joining us from mercer, not from mercer, d.c. >> and you're from harvard? >> oh, did you hear him? he came right back at you with harvard. >> that's painful. >> i fell for the stupid cincinnati trick, too. >> do you know how many painful -- did you just write it off after that, john? you haven't had to go through the stuff i did. i had providence. >> i had the shockers. >> the shockers, they had a shot to win at the buzzer. >> it took them a long way. >> not a great shot but they did have one. >> they should have given it to clay anthony or to ron baker. they didn't get it -- they had nine seconds. >> those guys were smothered, though. it was a terrific game. great, great game. >> did you see the three-pointer that the kentucky guy through up falling backward that hit the top of the backboard and went in? that's the kind of stuff that happens that is a dagger, but then ron baker hit another one to hit the backboard, too. i've got three left that could get in the final four, john. that's all i'm going to say. >> what do you got? >> still got kentucky, still got arizona, and i still got iowa state, which was a great game. their best player, just my luck, breaks his foot, george. >> he breaks his foot and it is just your luck? >> yeah, because i picked iowa state to go to the final -- >> becky, that's how you spell narcissism. >> but kane, they were still good. i love iowa state. did you fill out a bracket, john? >> i didn't, actually. i usually don't, joe, because i tend to follow my own team and not others. so it's like i might as well just, you know, throw pain up on the plaque et. >> i get hurt with my heart instead of my -- >> i know nothing about it and listen to you and that hurts me, too. >> what do you mean it hurts you? you are in sixth place beating me. >> am think. >> yes! it's not over. >> becky, i will have to say, if you think about joe's larger value structure, having cincinnati beaten by harvard, that's got to be -- he needs some comforting on that. >> why do they even play basketball? >> i thought it was a sure pick. >> throw the ball here. i mean, you know, ivy league basketball. >> you realize the harvard coach is a duke guy. >> yeah. jabari is gone, andrew wiggins, he's probably gone. >> the best thing that happened yesterday was charles barkley was on television and he said jabari parker needs to stay another year. >> i love charles. he said a lot of these guys should stay. there's no reason -- he mentioned that kobe did great, but some of the greatest players did not immediately -- >> i won't bet on it, though. >> it's still -- wait until friday night. iowa state versus connecticut is going to be great. that's going to be great to watch. there's other good match-ups going on. is this a business news -- what's the president -- there's no troops, are the russian troops at the rio grand yet? we are not worried, we gave them san diego, but what's going on? >> a bad situation. the administration has to hope that the steps that they are taking will dissuade the russs from going beyond crimea. you've got some criticism from within the president's up party, some of the foreign policy community saying he hasn't been tough enough on the sanctions. nobody, of course, is advocating using military force. so you are left with calibrating the sanctions correctly. they do seem to be beginning to pinch the russians, but i don't think anyone has a sense of oupt michl, joe, that they can roll back what has happened in crimea. it's about what happens from here, whether he goes further and whether or not you can show the rest of the world that, in fact, there are costs and consequences in a way that dissuades other people, china in the south china sea and that sort of thing from making similar aggressive moves. >> yeah. i haven't talked to -- when andrew is not -- i get backup for things i want to talk to him about, and becky, but andrew, even more because we like to go back -- nate silver, you think is like the jegenius of all tim are you writing him off? >> you think he's brilliant? the last time you made a prediction about the president -- >> i love him. he's so good. he's so good. >> i think that nate is a stats guy. >> right, he doesn't play sides. >> i don't think he has any political view at all. he thinks the gop is going to win the senate,easy. >> so you're not going to -- i've always liked him. i don't know where you stand. >> except for -- >> except for three years with jobs. >> it's not gone, but they have a good shot. look, they had good shots in 2010 and 2012. they didn't come home. they still have a very, very good map. most of the races that are most critical are on republican turf. the president's low. >> he has a horseshoe and gets very -- he says it happened for him. and the minute mum wage, he's going to use some of these things, i bet you, i'm not writing off the senate yet, i'll tell you that much. >> on the minimum wage, the republicans, this is something they could take away from the democrats. but look, you don't have to be nate silver or any kind of stats geek to realize that the senate is in danger. and i kind of got a kick out of the weekend when nate wrote a piece describing prospects for the senate and said, my picks are very close to those of charlie cook and stu rothenberg and others that do this for a living. just a reminder, he's not the first person to come around to figure out odds in campaigns and average polls together to make a statistical representation. >> what month is it, is it april yet? >> there's more than one smart person in the world. >> it's march. so let's see, march, november, that's three plus -- >> hmm? >> it's a long way off. a lot of things, a lot of things can happen between now and then. >> what democrats have to do, joe, is have a few of those embattled democratic incumbents who won in 2008 with the president and figure out how to hang out. it's not going to be easy. it's not impossible for the democrats to hold on. >> don't forget, the republicans' ability to snatch defeat. >> they are better about that this year, though. they are doing better at keeping themselves out of the story. >> we'll see. thank you, john mercer, from washington. thank you. >> and thank you, joe we are knap kernan. coming up, the first victim of the jpmorgan story. an executive in china is resigning. we have that topping the executive edge when "squawk box" returns. welcome back, everybody. right now it's time for the executive edge. jpmorgan chase chief executive for chinese morgan banking will be leaving the bank according to a memo. a departure that comes amid a probe on the hiring practices in asia. the wall street journal which first reported fang's departure said he was a key authority in whether they investigate whether they violated bribery laws by improperly hiring chinese officials. you have been following this story pretty closely, andrew. >> well, someone is getting thrown under the bus for this. whether they should have been thrown under the bus, i don't know because i have larger questions about whether the program was really problematic or not. it appears as if it might have been problematic, but as you've said, when rome, do as the romans do, so i don't know what the -- i don't know what the right answer on all of this is. >> it's one of those things where you are in a place where probably they are well connected but almost the most well educated and coming from the pool of applicants that you probably are most likely to look at in the first place. unfortunately, there will be -- >> once they start creating the lists, once they start putting -- not putting them on paper, but making lists and potentially short-circuiting the process -- >> just watching what happens with the sanctions and the way people do business in other parts of the world different from here, it's -- >> it makes it hard. >> it does, but you need to definitely play by the rules. >> the other question, are all the other banks going to get in trouble? because i'm convinced that everybody was doing it. >> why wouldn't you? you need to compete for the business. >> all the firms were trying to hire these talents. i don't know if they were talented people, but these talents, if you will. some of them probably were talented. >> this is a story from sunday's new york times. au revoir entrepreneurs. >> the dude that had to leave and move to london reminded me -- >> explain the piece. >> everybody in france, everybody in france who is trying to start a business has to leave. and they have to. and i'm going to read to you, it says saying their new country stifles business, they are trying to find new opportunities in london. look at this quote i made for you, andrew, do i have it? after his attempt to start a business, foundered under a pile of government regulations and seemingly endless parade of taxes. now "the new york times" somehow is able to connect that, those two things to having trouble starting a business. they can somehow see this and connect the dots in france. yet they would never, ever, ever say that could be similar to what's happening in this country. so my question that i want to ask you was, a, do you disagree that regulations and high taxes are detrimental? and two, or two, do you just say here in this country it hasn't gotten as bad as it is in france and therefore it doesn't really matter. >> bingo was his name-o. i'm going with number two. >> so we have taken to extreme level, those things could hurt business. >> 100%. >> but where we are right now, we still have room to go with more regulations and higher taxes -- they are not having any effect now. >> no, i suspect they are having effect, just not a remarkable impact in paris. >> all right. but did you see the dude? he reminded me of you. he has the flat stomach or is wearing one of the shirts to suck it in. >> that's what i have on right now, yeah. >> he has the cool hair, his shirt is out. he looks like a sorkin, sort of. >> how is his hair? >> he's got the cool hair but had to move from france because of this. so "the new york times" understands that maybe those are negative for business, but here we are just not -- it's not similar to what's happening there, basically. taxes are -- >> directionally, if we continue on the path, we could -- we are just not there yet. when we return, the week ahead for wall street. will international headlines and raising military tensions in turkey and ukraine trip up the bulls? we'll talk about that, right after this. about business internet? ok, how about thirty seconds? at comcast business our internet is fast. up to 5x faster than slow dsl from the phone company. and our phone's better too. sign up for internet and voice and find out how to get four weeks of internet for free. time to make the call. 800-501-6000 comcast business. built for business. they're the days to take care of business.. when possibilities become reality. with centurylink as your trusted partner, our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. every day of the week. centurylink® your link to what's next. improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we'll raise it yet again. in the headlines this morning, economists are becoming optimistic about u.s. growth pros pects this year. the latest survey from the national association of business economics puts u.s. growth at 2.8% this year up from 2.5% as they were expecting in the december survey. economists think bad weather will cut first quarter growth down to 1.9%. and coca-cola is in a dispute with one of the largest shareholders. wintergreen advisers that holds more than 2.5 million shares wrote a letter to coke's board saying it's disappointed with coke's 2014 equity compensation for executives. wintergreen says the plan transfers an unnecessarily amount of wealth from coke sharehodders to management. coke says wintergreen is misinformed about the equity plan and it is tied directly to the achievement of specific goal, but what i saw on one of the papers this morning, they said billions of dollars would be transferred from the -- did you read it and see it? the picture of moktar kent there. what was the number? i forget where i saw it? >> go ahead, we'll find it. >> and herbalife is going to nominate -- they are going to nominate, followed by herb greenberg, is going to designate carl icahn to the board. he's the company's biggest shareholder with a 16.8% stake and supported the nutritional product maker in its battle against bill ackman. how much? >> $13 billion. >> that's what they are claiming. >> the company expects the 20 this plan will award 60% options, 40% full value shares resulting in the issuance of 340 million coca ko already a shares that would be worth a reported $14 billion. this would be a transfer of $13 billion from our pockets to the company's management over the next four years. >> i saw that number 13 billion. >> that's on cnbc.com. >> yeah? >> the question is how incentive oriented the shares are. it's at the current value, but i don't want know how that actually works and practices over time. we have another story -- >> i'm shower your paper will delve into this. >> i'm saying we should delve into this stuff. >> but somebody really doesn't like -- >> money. >> yeah. or executive compensation or greed or earned success, any of that type of stuff. >> the planning con junction with previous equity plans will dilute existing shareholders by 14.2% winters says. >> that could be material. we'll come back to that in a bit. meantime, the g7 about to hold an emergency meeting to discuss the crisis in ukraine. we'll get to our cnbc chief international correspondent michelle carusa cabrera here with us this morning. >> there are a lot of headlines to tell you about. we'll roll the video of the president arriving in the netherlands today. he wanted a very specific g7 meeting to occur early. and today a very specifically g7 and not the g8, russia was not included or invited. as he arrived, squawk now has a special place in its heart for the speed skating team and the president congratulated the dutch speed skating team in his opening comments. on a much more serious note, the top military commander was in brussels yesterday speaking about what he says is thousands and thousands of russian troops o on the ukrainian border on a disputed strip of land that borders moldova. it wanted to be independent and nobody recognized it for more than 20 years. there are a lot of russian troops there and he's warning there are potential issues. we are all wondering if putin is done or not, hence why we are seeing this meeting occur in the netherlands today. i also want to tell you about turkey, which had a huge rally yesterday and the prime minister there has been under a lot of pressure with all kinds of scandals breaking about him. he's banned twitter. and listen to what he said about a local of other social media. i don't understand how people of good sense could defend this facebook, youtube and twitter, there are all kinds of lies there. he faces an election later on this month. this is one of the fragile five, of course, who is worried about a balance of payments crisis a few months ago to raise interest rates. something we have not seen in a long time, so i'll bring you back to russia, the austerity protest in spain ended in violence. lots of shooting. we haven't seen this in a while, but it's a reminder they still have very large issues in europe. they have issues potentially about deflation. everybody is going to talk about the pmi data that occurred in germany and france this morning better than expected, but the fact of the matter is everybody is waiting to see what druggie does when it starts inflation there because they are worried about the long-term low inflation or deflation. a country like italy with a ton of debt that is punishing to them to have deflation. and it brings me back to russia because the western european continent has made choices about energy consumption, about how they are going to be competitive or not competitive and ended up quite reliant on russia for their energy, which brings us back to the sole issue, what do you do about russia? the europeans can't do much. >> the u.s. doesn't have a lot it can fall back to do. the europeans have less. what's the answer? >> because people don't want to go to war. so ultimately what you do is stick with nato. you have 28 countries you promise, everybody is going to promise to defend each other. not to defend putin, but i think the one thing to remember is that ten years ago nato was a thousand miles away. now it's 100 miles away. >> possibly a normalized russia after this, do you go back to the -- maybe it is not an official cold war but a chilly relationship between the two. i don't understand how to get back to the point -- >> we reset our relationship. that's a good -- did you see over the weekend? >> "the washington post" picked up the whole thing from when obama was attacking mitt romney for saying russia was our people. do you remember the reset button? >> yeah. but then another german piece that i couldn't help but think about the lng is the way to go. that's the way we undermine russia's influence in europe and that people who say we shouldn't export have no idea what they are talking about. >> the president heads to saudi arabia next. he'll be there to assure them that he'll do everything possible. >> he says, don't export anything, use everybody else's natural gas and then we are left with everything. >> it was a huge piece that i was thinking about. >> and you missed me. >> i thought about both of you, it was weird. >> i can cut the soundbyte when he says congratulations on speed skating. >> does the president know he said, football suckles. oh, you're a sore loser, you must be an american. obama loves the euros. >> you can't believe you lost, you must be an american. >> he loves to say this to people who derive us. was there a pillar there or no? >> no pillars. >> did you see michelle's entourage over in -- 80 people, i think. >> 288,000 dollars an hour to keep the plane in the air, was that the right number? i have to check. >> that's not the mention the carbon footprohibit. >> up 47,000 an hour. >> you are just throwing that out like you care. you don't -- >> i do. >> channeling me a little bit here, does he travel too much? he's played more golf. >> you were away for a week. you got a little backup. >> good, get it out. let's get some monday morning outlook on the markets. joining us from chicago's dw trading group, dick hoey, let's start talking about china's pmi. that was disappointing once again. >> it was on the weak side, and a lot of the recent numbers coming out of china have not been dreadful but they have been on the weak side. i think they got some excess inventory they need to work off over there. and there is uncertainty how the liquidity is going to evolve. i don't think this is the beginning of some big hard landing, some big heartbreak. there's still pretty good labor market over there. they have a slowdown in the number of new workers coming into the workforce. so they don't have an upsurge in the unemployment rate. to my mind, china is us is taped expansion at a decelerated pace. i don't think it's going to blow up the world, but it is on the weak side. >> all right. we'll talk at that, though, weaker numbers out of china, a lot of concerns in europe about what's happening in russia. why isn't the market reacting more to this? >> that's a good question. we are at near or all-time highs despite some problems elsewhere. and i guess it's a matter of those problems not yet hitting here squarely, although i think you can look at demand problems such as retail sales up 1.5% year on year. that's the lowest retail sales annualized rate since about november of 2009. but the profits of the companies are doing well. and so, therefor, the profit margin is doing well with companies so therefore we keep pushing. i do think the situation in europe, the situation in china, the situations here and there make it a little more vulnerable should we start to get bad corporate news here. >> does the market seem expensive to you at these prices? or is this something you think is justified because the economy is picking up and that will in turn boost earnings? >> on the idea of picking up, the report when they brought their estimates for the year up even after the disappointing first quarter, i'm not quite sure how they look so far ahead because the data they have is worse now than they expected. when they last did a survey. so i'm a little confused at the idea of it picking up. thinking that it's going to pick up and having it pick up is too different things. i do think that part of the -- me, i think that the market was expensive a year ago, but that's me. i think one of the key reasons, like i said, is this die conmy between the economy and the stock market, and the idea that the corporate profits are quite good, but one of the reasons for that is a slack labor market and slack wage growth. so that's hurtinging aggragate demand as you can see from the u.s. retail data. so there's that push and pull, and do the foreign events, does that -- is that the straw? certainly not at this stage. >> dick, what do you think just about the u.s.? >> i see no disparity whatsoever. this is a classic mid-cycle phenomenon. i'm expecting three years of 3% real gdp growth. in the end, we'll have an eight-year economic expansion. the reason the stock market has gone up is the economic bears that we get a double-dip recession or thought we would get into some kind of european financial meltdown have kind of abandoned their bearish mindset. there's been a drop in the armageddon discount that these terrible things are going to happen. so what the market is doing is, it's discounting an extended economic expansion, which is going to generate persistent rise in corporate profits, and the market is being totally rational. >> how long do you think this lasts or can you tell? >> i think the economic recovery lasts eight years into maybe mid-2017. i think we can get in trouble in 2017 or 2018, but in the meantime, this -- for the last half decade have been arguing that the nightmares that people have aren't real, they aren't timely, we are in a good, solid, sustainable economic expansion. and monetary policy is still easy because inflation is low, which is very unusual for 4 1/2 years after the recession. >> dick, thank you. lou, great talking to you, too. >> did you see the homeland guy died? 65, melanoma. >> great actor. >> great chair director. our condolences. next up, an exclusive interview from china's vice finance minister. we'll head to beijing for that next. and kentucky pulls off a huge upset, but they have been getting better and better, like louisville, some of these teams peak during the tournament. one of the big story lines heading into the sweet 16. that's coming up in a few minutes. 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(announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. welcome back. eunice eun is here now with more on our next story. eunice? >> good morning. it was a big headline today, the fact that the hsbc flash for march shows manufacturing contracted raising expectations that the government could step in with some type of stimulus, but it's probably a good idea not to expect an aggressive stimulus. earlier over the weekend i spoke to the chinese vice finance minister and he said that the government here has acknowledged that there are many problems and that they don't want to repeat the same mistakes they did in the past. this is what he had to say. >> we think 7% to 8% growth rate is in line with the chinese economic potential and in line with our real capacity, and we must do extreme efforts economic restructuring to make a more investment in environment sector and to make more investment in the infrastructure building in the remote area and the poor area. >> now the other big topic we were talking about was the yuan strength anything for years but recently it's been weakening, so i asked him what he thought was causing he and he believed the weakening was a reflection of market principles and the current economic conditions in the country. this is what he had to say about the yuan. >> the larger chairman financial reserve is healthy, and we don't think it has a big potential for deevaluation, but for the current month february figure. >> one thing i thought was really interesting is that everybody around the world is talking about china fears and the concerns about the economy. i asked him what he thought the biggest risk was to the global economy, and he told me that he believed that fed policy was the biggest risk. he was saying that on the one hand, the tapering is good because it shows that the u.s. economy is recovering, but on the other hand, he said he's very concerned about how that tapering is going to go and what kind of impact it's going to have on the global markets, and he believes the central banks need the coordinate their efforts. >> that's really interesting. india's central banker has said similar statements in the last month or two, just talking about how the fed is the one who is deciding the world's economy. we here look over and think it's china and what they are or aren't doing. china is looking back at us and thinking it's us. it gives us something more to think about. all right. eunice, thank you very much. when we come back, the sweet 16 is set, but after this bracket-busting four days, which storylines should fans watch now? "squawk box" will be right back. 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joining us now is dave briggs, the host of "sports dash." and nbc sports network. becky blames me for picking wichita state. >> my knowledge of basketball comes from what i hear from you. >> the team was 35-0. >> can i call you next year. >> call me next year. wichita state, great run. kentucky is finally playing the way they should have all year. >> they are. they peaked late like they did last year. louisville seemed to do the thing. they were man handling kentucky in the first half. they could have been up ten at the half. it looked like they were going to surprise the world. >> florida, michigan state, arizona, your favorites, lou itville, the four favorites are still alive regardless of bec becky's unfortunate bracket. >> where are you in the standings? >> i have 41 wins. you have 43. >> that's really funny. i know nothing. >> it's not over yet. >> dayton, do you think they have a shot? that's a lot of fun. >> i can't wait for iowa state against shahbaz. >> they will hang around they they can meet florida. >> iowa state, they lost their best player. >> to me, second best player. melvin edge and the big ten, big 12 player of the year. >> how about cane? >> cane can play. >> i got 9 out of 1. you got 10 out of 16. i can have 6 out of 8. >> you didn't fill out a brack he. >> i lose every time. i'm not good enough at this exercise. >> when mercer can beat duke, the craziest stuff happens. there's a lot of parody. >> duke, north carolina and kansas all out of it for the first time since 1979. that is strange to see. the s.e.c., 7-0, no one predi predicted the s.e.c. would come in here and go 7-0 and california would have three teams in the final 16. >> i have creighton going to the final four. >> doug mcdermott got shut down. three points in the first half. >> when they got in the paint, they were swatting everything away. >> baylor is good. baylor could go to the final four. long, lean, 60% from three. they didn't just shut down mcdermott. >> your final four, arizona, florida. >> florida, michigan state and lou louisville. florida against michigan state. won't that be a great game in dallas? >> that's a long way off. you don't know if that will happen. >> virginia is a very good team. 16-2 in the acc. they could get to the national title game. michigan state has everything going or them. >> i want iowa state in the final four. it hurt me bad when he broke his foot. >> i don't think you get there. >> he was the guy leading that day. >> no one wants a cinderella, stanford or dayton. >> stanford hurt me bad. >> i'd take dayton. >> the president tweeted to one of their players after the upset. >> i've seen dayton beat the bearcats many times. >> this is the most popular year ever, i think, isn't it? >> the rateings have shown that. >> i like buffett. someone is going to get all of them. >> i would ensure the billion dollars. >> 1 peop6 people. >> 15 or 16 people over the weekend. it was gone by saturday. >> 25 games and one kid had the first 35 games perfect. >> i think mercer. >> the first 35 games. dayton busted one kid who wasn't in the billion dollar bracket but he was in the yahoo! bracket. >> wear a cooler shirt/tie combo when you come back. >> i better wake my wife up. >> i just thought you got dressed in the dark. >> no, i like it. allen kriueger will be our guest host. more "squawk" right after this. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the futures this morning have been indicated higher. right few the dow futures are up by 17 points, s&p up 2 points and nasdaq is up by just over 4. the ten-year note this morning is yielding at least at this point, 2.764%. that yield has picked up steadily over the last week. if you look at the headlines this morning, president obama has arrived in the netherlands as he begins a week of international travel. the president originally scheduled the trip to participate in a two-day nuclear summit but an emergency g7 meeting is also on the schedule to talk about ukraine and russia's annexation of crimea. cisco systems will reportedly spend $1 billion over the next two years to enter the cloud services market. "the wall street journal" says the money will be invested in data centers to run a unit called cisco cloud safss. "the wall street journal" says that apple is in talks with nbc universal's parent comcast about a service that would stream apple content directly to tv sets, bypassing web-related congestion. apple is said to issue a streaming music service. >> we were talking about how it would work. they're asking for a special pipe, a managed delivery pipe. when you're watching us on comcast, that video signal is not going over the internet. it's going over separate area of the pipe. >> the tv content always shows up without a hitch. >> that's what apple would be asking for. >> right. >> if you're comcast you're think i two things, "a," i have people leaving tv, right? and how do we keep them on board? so this would hopefully do that. "b" within can we actually create a margin expansion if apple were to come on board? because you could potentially charge more for the apple device. it's not clear, we were talking about whether you'd be losing money if you're an apple customer. >> what at&t did when it first signed up with april toll offer the devises. it wasubis sub sa -- subsidisin. >> apple is even more. other stories this morning, the houston ship channel remains closed as cleanup from an oil spill continuing, skimming boats are cleaning it up. the shipping channel delivers crude to more than a tenth of nation's refining capacity. the outage has yet to impact operations at exxonmobil's refinery in baten, texas, the nation's second largest. take a look at the price of crude. 9.72. joe? >> okay. i have even something later than this, actually. the chinese government says it cannot confirm that newly found floating objecting are kecked with the missing malaysian airlines jet. this is all old, all stranen crew described seeing a floating wood pallet and strapping belts in the indian ocean after satellite recorded images. just recently the australian navy is investigating two new objects spotted in the southern indian ocean. and one of them they don't know, they say it still could be something. hope is building maybe they are, seems like there's a lot of sightings in that area but it's so remote and hard -- can you imagine you're down in australia to start with in perth and you have to go 1,500 miles southwest of there. >> it's a four-hour flight out. you can only fly around two hours looking. it's a four-hour flight back. >> they have a name for it. the waves are huge, 50-foot waves. i know what you're thinking. what are you going to say? currents? you saw mother jones, they can't find it because of -- >> oh, really. >> they can't find the airplane because of global warming. >> this morning when it was 23 degrees, i was like, gosh, i wish those global warming people could get it right. >> extremes. more data out this morning showing a contraction in china's manufacturing activity. you're talking to her. i just -- you can do that. >> i can do what? >> china slowdown. what are the chances putin wants more. >> i think pretty high. >> 50/50? >> that's been his m.o. >> the one area we're talking about right now is an area that's a separatist area. they wanted to split -- >> what's the name of that? >> transnetar. it would divide moldova and ukraine. >> i'd give him that strip. are you going to give him anything -- >> you give him that, you give him this. >> even in europe he's popular now, supposedly. >> really? >> i read that in certain parts of -- >> okay. >> no. england he was more popular than the eu. >> well, that's a low bar. okay. >> go ahead. >> china, the manufacturing index, we have it in the united states, all over europe as well. it came in at 48.1. what's important, anything below 50 shows contraction. for three months in row, the pmi in china has showed contraction, below 50. they started to let corporate bonds default, which is a brand new thing there. they used to bail everything out. because of that we started to see copper getting punished really hard. because what we're discovering is a lot of people were using copper as collateral for loans. we can bring in the chart. you'll see the big decline. 9% decline in the last month. it coincides within we started to see some of the loans officially go bust. why copper is used as collateral has a lot to do with the weird incentive structures. suffice it to say, if you believe in the idea of dr. copper, which a lot of people do, what is this telling you about the potential for deflation and a bad chinese economy. that's why we're interested in the pmi this morning. >> i thought it was expected to be a contraction anyway. it was weaker than expected. >> there was a manufacturing output that came in at 47.3. >> the question is what does china do in chance? do they start doing more? one of the officials said they may speed up construction projects. >> speed up stimulus. the government isn't monolithic. there's also parts of the chinese government that show regret about stimulus spending that got bad loans. they're now turning into bad loans. just because you have people shoveling things for something that's useless isn't necessarily worth it. >> we have another guest right next to you. let's continue the discussion with leyland miller, the president at china beige book international. we've been discussing, why did you go with beige? >> people knew about it from the fed. we were attacking china in a different way, we're not playing around with other gdp numbers and headline numbers. we're looking at sectors, regions and the credit environment. >> what is china going to do about all this? >> everyoneess and distinct is get the investment train running. the credit transmission mechanism is broken. we've been repeating this over and over. they can cut the rr, inject funds into the system. it doesn't mean it's going to where it goes anyway. china needs to know it has structural changes. it's unlikely. it could happen politically but it's unlikely to happen and accomplish much. >> you do big surveys, massive surveys of people involved in business in china, right? aversion of the pmi but to a greater degree. >> i much greater degree and across more sectors. >> what evidence are you seeing related to the huge decline in the price of copper and financing that was driven by not just using copper as collateral, but iron ore and all of those commodities. anything yet? >> mining this quarter took a huge hit. we were seeing significant problems. copper is its own beast. when the economy slows down, copper takes a hit because of manufacturing and construction weakness. it takes a hilt because of slowdown in financing deals as you said before. copper takes a double whammy when you see a china slowdown. it's not just copper. it's copper now, but it could be iron ore in the future. the entire mining sector is worth taking a look at. >> how much do you worry about the credit banking system? >> despite the fact you have credit expansion over the past several years and they're continually pumping this into the country, it's not getting to small firms on the grounded that need it. you can play around all you want with the adding more liquidity but if you're not mixing the structural problems within the system, you're not going to get healthier china. >> we won't go into the details of why but are they going to change the interest rate level so the distribution of credit is set by the government and dictate and not by interest rates or the market. they claim they're finally going to do that. should we believe them? >> they have to move towards doing this. what you see right now is online lenders are the big hot topic. you're seeing they're offering higher rates and they're draining deposits out of the banking system. what the banking system is going to compete is going off balance sheet, more off balance sheet transactions that we saw a huge spike in wnps this quarter. >> wealth management products. >> in order to avoid the interest rate caps. as a result, you talk about liberalizing the system. you're actually making is more unstable. >> leyland, thank you for being here. michelle, thank you. >> pleasure. coming up, allen krueger. later, what will a trip to the mall look like in 25 years? a lot more coming up on "squawk" within we return. does it end after you've expanded your business? after your company's gone public? and the capital's been invested? or when your company's bought another? is it over after you've given back? you never stop achieving. that's why, at barclays, our ambition is to always realize yours. welcome back to "squawk box," everybody. the futures are indicated higher, the dow up 28 points, s&p up by 3, nasdaq up just over 6. turning our focus to jobs and the economy this morning, a major sore spot for the labor market has been the number of long-term unemployed. those are people out of work for 27 weeks or longer. there is serious concern among economists that many are giving up and dropping out of the work force. joining us right now is our guest host for the rest of the program, alan krueger. he's the former white house council of economic chairmans and professor of economics at princeton university. the long-term unemployed, it's a serious problem. how big of a problem is it right now? >> you can make an argument it's the most serious problem the economy faces. >> what's the percentage, the numbers? >> 36%, 37% of all the unemployed have been unemployed over half a year. >> these are people that get left behind. this sounds like a much bigger problem of people who are being forgotten. >> i think the longer people are unemployed the more challenges they face. employers are less likely to call them in for interviews. they become more isolated were more disengaged. i think extended unemployment benefits have helped to keep people in the labor force. but now that benefits are no longer extend, we're seeing people exhaust their benefits and leave the labor force. >> what can the government do? what can the fed do if anything to try and get these people hired or get them back in the work force? it seems like a tough problem. you understand employers look at somebody who hasn't been employed for two years and they think there's a reason for it. >> it's a tough problem, even a tough problem in good times. in the late 1990s, when the economy was strong, the long-term unemployed faced hurdles. i think it will require a concerted effort, not only monetary policy but we should reconsider tax credits to encourage employers to hire the long-term unemployed. >> that sounds like one idea. but monetary policy, what can the fed possibly do to help this group of people. >> it is the case that a stronger economy helps everything. we have stronger wage growth when the economy was stronger. >> it's not targeted in terms of helping this particular group of people. >> that's absolutely right. monetary policy is necessary but not sufficient. we need to focus public policy on the long-term unemployed. we have to think about what communities can do. it's a problem which to some extent is going to require efforts of families and communities to help the long-term unemployed get reengaged with the job market. >> there's a piece in "the wall street journal" that takes a look at the fed. the plan for now is they'll be keeping rates very low for an extended period of time even once they start raising rates. they're not going to get back to the point where they expect 4% interest rates when you had an economy firing on all cylinders. that seems like a broad fix for that type of people. is there a danger if the fed keeps rates low to try and help this particular group of people that things get out of control somewhere else? >> i think the fed has to cheap a close eye on financial markets to make sure actions are not destabilizing. financial markets have to keep an eye on inflation. given where we are with inflation, i don't see risk in terms of monetary policy being accommodative for quite some time. >> we've had this debate so many times, compared to why we're so sluggish in past recoveries that we've been able to do much better. we've had a die nynamic recover. it was a different recession, a deep recession. earlier i was talking to andrew about the "new york times" and what's happening in france. and "the new york times" has no trouble saying that the reason that you can't start a business in france and the reason that entrepreneurs are leaving is because of all the structural impediments to starting a business and all the negatives towards business. the i go says after his attempt to start a business, this guy moved to london under a pile of government regulations and endless parade of taxes. do you attribute anything to what you're seeing with the long-term unemployed to all these regulations and to the uncertainty with higher taxes? >> i actually think that's play nod role. if you look at the pattern of what happened to the long-term unemployed in the last recovery, they face tremendous challenges. not different from what they faced today. the different is job growth was slow in 2008 and 2009 because the recession was so deep. that's what put us on this path with a large number of unemployed. >> no effect on the long-term unemployed or no effect on dampening the environment for business? >> i think what's dampened the environment for business is that the financial crisis was so deep. >> no regulations, no uncertainty about obamacare or higher taxes? none of that has had a negative effect? zero effect? >> i think you could say that having universal health insurance will help more entrepreneurship. if people fail at least they know they have health insurance coverage. the person in that article said he'd like to come to the u.s. if he fails in the uk. >> it's degrees. >> you're saying it's degrees. >> i'm just so happy that the "new york times" is at least heading in the direction that maybe higher taxes and all these regulations, maybe they, at some point, could hurt business. maybe not now but at some point. >> it's not an editorial. >> look how profitable businesses have been in the u.s. it's hard to say regulation has been choking their success. profit share is at its highest point of all time. >> right. doesn't seem to be -- we're dealing with obviously a lot in terms of trying to keep the jobs here. i guess based on our tax policy, right? >> we've also done better than most of the rest of the world. >> we always have. but we always have. >> we used to be able to count on that. we used to do 3.5% gdp growth versus 2% in europe. now we're tied. >> we also used to be a lot younger. we had a faster population. >> speak for yourself. >> just because you were on vacation -- >> i need to talk to you more about princeton. you're basically just a professor there. do you have administrative roles at all? do you have any pull? you'll be with us for the rest of the show. coming up -- you're young, right? tenured? >> oh, yeah. >> good. coming up, dennis gartman will join us at 7:30 eastern. it's close. it's in new jersey. i don't want my kids going west coast. tomorrow, charles plosser, president of the philadelphia fed. how old are the twins? >> 3 1/2. if you can hang on. >> he's young. weekdays are for rising to the challenge. they're the days to take care of business. when possibilities become reality. with centurylink as your trusted partner, our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. every day of the week. centurylink® your link to what's next. welcome back. you are looking right now at a live shot of universal studios in orlando. take a look right there, right now. >> wow. >> coming up next, we have the trading block. how much more volatility will the oil markets see now that sanction have been slapped on russia and what will your local mall look like over the next 25 years? brick and mortar stores disappear. we have that story coming up in the next half hour. back in a moment. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. welcome back to "squawk box" this morning. in the headlines, treasury secretary jack lew will have an outpatient surgery tomorrow. twitter is shutting down its music service less tan a year after its debut. the twitter music app has been removed from the apple apps store. it will continue to work for current users until april 18th. user interest fell quickly after its debut. there's a new leader at the weekend bovl box office, "divergent" taking in $56 million. >> i saw it. >> you did? >> yes. >> disney's "muppets most wanted" was second followed by last weekend's box office leader, mr. peabody and sherman. >> looks like a "hunger games" wanna be. >> it was. >> the girls wanted to see it. we went opening night. >> it wasn't my choice. >> that girl is like a wanna be jennifer what's her face. >> they say she is the new j.la, jennifer lawrence. it's a series of books, a trilogy. >> what happened to poor kate what's her face? >> kate winslet? >> she's in a crappy adventure movie. >> this one will make a lot of money. >> it's a trilogy. it gives you a long-term security for some sticking around. >> sandra bullock made 70 million on "gravity." >> good for her. >> you need to get -- >> she made a ton of money on "train." >> you need to get "the new york times" on that. >> 70 million is too much money? >> yes. wouldn't you? totally unfair. totally unfair. >> by the way, you were wrong on -- i don't want to say cnbc was wrong. on the coke -- >> is it not 13 billion. >> according to the letter they claimed it was $24 billion. that was the number in the letter. >> he said 13 billion based on today's prices. i don't know if it's 24 billion by the end of four years. >> i will check it out. cnbc quote the thing, too, using 13. i haven't seen the letter itself. >> got it. >> we need to move on. because consumers are wondering, what did the average price of gasoline do recently? >> ready? >> yes. >> oh, god. it rose about 5 cents over the past two weeks according to the latest lundberg survey. i'm sorry did i that, andrew. that was like "gravity." jump in the price of ethanol helped drive the national average to $3.55 a gallon. get out of this. more "squawk" coming up, next. >> or right now. >> what happened? i thought we were going to -- >> we moved that. we talked to too long. they had to move that headline from the end of the last block to the beginning of this block. >> we had to do the lundberg. i guess we do that. >> we had to show the video. >> all right. >> come on. >> let's get a look at the week ahead on gold, oil and the currency markets. calling in now on the "squawk" news line, dennis gartman. here's what i can tell you, i was doing a radio thing, hugh hewitt, i think. i don't see what peter schiff is saying. is this a new grand super cycle bull mark net gold because of fiat currencies? is that what we're hearing? we're going up 4,000 now? >> peter has been bullish of gold forever. he's always bullish of gold. if gold falls $300, he's bullish. if it goes up $10, he's bullish. >> you're not necessarily calling for -- i remember, we were supposed to go to 2000. it was a slam dunk the year before last. we took a wrong turn at albuquerque. that never happened, did it? >> no. >> with all the printing we've done, not just here but globally, you have all this russia is on the border of the ukraine. you've got a lot of stuff that should be very bullish. seems like it makes sense. >> gold should have gone up 50 to $100 on the news of russia. it really didn't. i happened to be modestly slightly, tentatively bullish of gold. i own a little bit in the end denominated terms. gold is nothing but a currency. too many people, especially on the very far right, i'm somewhat to the right but i'm not very far right. not one of the hard money advocates. those people seemed to think gold should always go higher for any and all reasons and more often than not they've been wrong. >> you would think if every currency in the world has been the base, gold would be the place to good. they always seem to find the least bad currency and buy that instead of gold. the dollar seems to be the one still. >> the dollar will continue to be the one major currency, the one reserve currency. i argue this speech after speech. all things being otherwise equal, the country with the dominant power remains the reserve currency. >> i read something about our navy. we're calling -- there's some way we said we boosted our number of naval vessels and we were using shrimping boats. >> two of our mercy boats, hospital boats, we're now calling them weapons. i think that is a bit discouraging. that's what this midagency does. if we use a hospital boat as an offensive weapon, that's a little dismaying. >> other than -- where's the most interesting place to be in what you follow? terms of commodities? >> i think, take a look at what's going on in the oil market, joe. i hate to give -- this administration a great idea, the smartest thing they could do to counter what mr. putter is doing is fight him on the one weapon he has, which is oil. if i were the administration i'd go ahead and unloosen, let go of, remove, a great portion of the strategic petroleum reserve. you could get crude oil to fall $10 or $15 a barrel, due damage to the russians and at the same time send the stock market higher. i hate to give them a good idea but i think that's what will likely happen. they released 5 million barrels of crude, which sent it down $2. if you would announce we could release 275 million barrels and do you it over a period of time. you could send oil prices down. >> the argument right now is that we should be focusing upon natural gas. that's years into the future. >> yes, yes. >> i find that amusic. what needs to be done immediately is open up the strategic petroleum reserve. >> he may have rebuilt the entire soviet union by the time we get the lng ready to go. >> it has no effect on the economy. we know that now, don't we? >> even with the keystone, getting that approved is even a majority of democrats favor that. i think that's what -- maybe it was a polarality. i read that over the weekend, too. that makes me think maybe they'll do it. what do you think, ken nis? >> i don't i this they have a choice than to approve the xl keystone pipeline. the market has figured out a way to get around the need for the pipeline. we've used our tracking system, our railroad to move it to the refineries in a specific manor. we still need it but we truly needed it two years ago when it should have been approved by delaying it. we've prove than we really don't need it to be quite honest. >> that oil is coming out of the ground way way or another. >> one way or another. >> does he want to comment on that? he spent time in the white house. he might have views. >> do you have any views on that? >> i actually find myself in a fair amount of agreement. >> we do on a lot of things, princeton. >> i can do that. >> all right, all right. i'm for sale. dennis, thank you. we'll have you in studio again next time you're on this coast. you're on this coast. you're in virginia. >> i'm on this coast. i think i will there be in two weeks. >> see you then. >> i think virginia is overrated. >> them was fighting words. >> not the state. the basketball team. >> the basketball team. what did you think i meant, the state. >> no. i like virginia. commercial real estate and the new urban order as technology changes, so does the work we work, shop and play. what will the next 25 years come as we take look at the mas, skyscrapers and warehouses. and coming up, peter fisher will join us. >> that's a good shot of him. >> that's an action shot. >> that's cool. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. ♪ aflac, aflac, aflac! ♪ [ both sigh ] ♪ ugh! ♪ you told me he was good, dude. yeah he stinks at golf. but he was great at getting my claim paid fast. how fast? mine got paid in 4 days. wow. that's awesome. is that legal? big fat no. [ male announcer ] find out how fast aflac can pay you at aflac.com. cnbc is celebrating 25 years. but taking a look at the next 25, how we will be living, playing and working. we kick things off with commercial real estate and the new urban order. diana olick joins us this morning. the internet is changing the way we work, shop and play. that has a huge effect on the real estate in which we work, shop and play. of course i'm talking about commercial real estate. >> we used to work at the office and shop at the mall. today we shop online and telecommute. >> when you look up around you at these tall buildings you can see with certainty that 25 years from now we'll still need all of these offices? >> i think we will need office space. the challenge for us right now, we have more office space coming online. in a city like new york we're on the cusp of one of the biggest office building booms we've ever seen. >> commercial real estate expert sam shandon says even 25 years from now we'll still go to the office to work, most of the time but use our spaces more collaboratively and need fewer square feet. >> the sharing of ideas is the real reason we're coming together in the same place. let's design the space to do that efficiently and maximize the value of being together. >> sharing desks or so-called hoteling is one way, living and playing closer to the office is another. exactly what facebook envisions in menlo park, california, building a major housing complex so its workers can live closer campus. >> look at the neighborhood centers and the lifestyle centers. i think those are where the world is going. >> because the world isn't going to the mall so much anymore. online shopping has already hit brick and mortar stores hard. warehouses are the darlings of investors as distribution centers for goods bought online are in much higher demand than retail space. >> the strip malls really isn't successful within urban areas today. the strip mall is a vestige of the past. >> malls won't go away entirely. experts tell me they'll become much more entertainment oriented. guys, i think the best way will be protective cover for the drones flying around. >> there will be no droughns. >> exactly. let's continue this conversation. we are joined by david henry, president and ceo of kimco realty. you heard those fighting words. it's a vestige of the past. >> e-commerce represents 6% of total sales today. and a lot of that has come at the expense of the catalog sales. 20 years ago catalog sales and direct marketing were 10% of total sales. that is way down. a lot of the e-commerce has come as a result of the decline of catalog sales. >> it's been amazing how quickly online sales have grown. i find myself going to malls less frequently. do you do anything defensively, this idea of making more entertainment centers, bringing people in. can you do that with a strip center? >> no question. you have more theaters, more restaurants, more health clubs. it's about creating a more than 9:00 to 5:00 experience. i like the expression our generation goes to bed at 9:00, the new er generation goes out t 9:00. >> the experts say the strip centers will be more about the ja jazzercise place. it's the dentist or veterinary. >> something that draws me out. >> medical use is a growing use. urgent care facilities, dental care facilities. it's all about essential goods and services, grocery stores, drug stores, dry cleaners, health clubs, commercial banks, mcdonald's. people are eating out more often. >> i traditionally never thought about strip malls having a quote, unquote, anchor tenant. >> home depot does in a neighborhood shopping center. i will admit it's not the same as the strip malls i used to think of. it's more of a squared area with a restaurant and home depot or something. >> you have the neighborhood community shopping center, all about a grocery store as your anchor. >> that's interesting. >> whether it's stop and shop or something like that. or a power center we ab sliction of junior boxes, bed, bath & beyond, marshalls, target. both of them are doing well today. you have a 35-year low of new construction and you still have population growth, growing gdp. one of the most interesting things about the next 25 years you'll have 60 million more people in the united states. all will need to eat out and dry cleaning. there's going to be good demand for commercial real estate and retail space notwithstanding e-commerce. >> what about the big box theory that you'll have to reshape what the big box actually is? >> no yes about it. generally they're looking for a little less space. the tjx's, the ross stores will open up 200 stores per year. >> what do you remake that big space with? you make part of it a fulfillment center. showroom is very important. i think someday you'll see amazon rent space in order to show case their kindles and fires. apple stores have had huge success being brick and mortar. >> thank you very much for coming in. apriling and comcast working on a deal to enter the streaming television services businesses. those actions and more with a little, right after the break. at the top of the hour we speak with senior director and "squawk" market master peter fisher. 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[ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ what is this, kentucky? >> uk, wildcat. you read page 6 today? >> no. >> cnn, that piers morgan time slot is like "the hunger games" for don't lemon, bill weir and jake tapper are in a death match. >> last man standing. >> tapper and weir are already competit competitors, i guess at abc. it's to the death. they want that 9:00 p.m. slot. >> ugly business, isn't it? >> you said penis on the air, did you not? >> on accident. i was trying to say reese's pieces. >> you seed reese's penis. >> can i say it or not? >> if you mean to? >> this is the worst just ask -- which new york divorce -- you would know this ab within drew. was complicated by a fight over a faulty penis pump? >> what? that's not a real thing anyway, is it? >> why are you asking me? >> alan, you don't want to weigh in on this? >> what top hollywood executive had to be rushed to the hospital by his younger -- >> are you bored by the show? >> his younger girlfriend when their sexual escapades resulted in a fractured member. >> a fractured member? >> it's not a bone. it's a muscle. >> oh, my lord. can we go to the stocks. >> you want to do stocks to watch. >> i wasn't bored. i happened to look at page six. >> this squawk-ward moment has been brought to you by joe kernen. >> i didn't say fractured muscle. >> it's not a bone r. reese's pieces. you said it. >> about a streaming tv service, according to "the wall street journal," the talks would involve apple content being streamed directly to tv sets. that would bypass web-related congestion. the paper does say there are many hurdles that would have to be overcome to strike a deal. four other just askings are just as bad as those two. >> herbal life agreed to let three more representatives of investor carl icahn on its board of directors. that agreement will give icahn five seats on the 13-member board. he's defended the nutritional products maker in it's ongoing battle against ackman. new skin enterprises. china fined the company more than $500,000 for illegal product sales and for misleading local consumers. new skin says it's correcting the issues involved and isn't aware of any other pending actions. >> who has gotten divorced in new york famously, in new york, andrew? do you know. >> i have to call life line. i don't know. >> just can't believe there was an argument about that. >> about the pump. >> they doesn't believe they exist. >> i don't know about them existing or not. >> i know for a drug test you can have a fake thing to make it look like -- so you -- yeah, yeah, yeah. >> can we go back to the strategic petroleum reserve? >> we have much more from our very, probably uncomfortable at this point, guest host, alan krueger. we add a "squawk" market master, peter fisher will join us right after the break. back in a moment. ♪and boots and pants and boots and pants♪ ♪and boots and pants... voice-enabled 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 aren't that wise. don't forget about i'm having brunch with meagan tomorrow. who? seriously, you met her like three times. who? geico. ido more with less with buless energy. hp is helping ups do just that. soon, the world's most intelligent servers, designed by hp, will give ups over twice the performance, using forty percent less energy. multiply that across over a thousand locations, and they'll provide the same benefit to the environment as over 60,000 trees. that's a trend we can all get behind. to manage your money.r guy around 2 percent that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. from the fed to china, investors head into monday's trading session with some jitters. black rock investment institute senior director peter fisher joins guest host alan krueger for a special markets roundtable. >> biotech on the bubble, the sector getting hit hard on friday a closer look at what caused the sell-off and whether or not you should be buying the stocks. commercial real estate and the new urban order. how the internet is changing the way we work, shop and play as the final hour of "squawk box" begins right now. welcome back to -- you know this song? >> yes, i do. ♪ >> you know the name of it. >> are you kidding me? i caught the connection. >> welcome back to "squawk box." ♪ pump it up >> i'm joe kernen along with becky quick and andrew ross sorkin. alan krueger is under the desk at this point. he wants to just hide. futures at this hour are -- no, you were okay. you're good. >> he wants to talk about the spr. >> he's a college professor. all right. you're young. you're dealing with young people all the tile, right? they are unrestricted, right? >> we do a lot of training subjects of what not to get into with the college students. >> last week we were up after all was said and done, right? >> yes. it was rough. >> what did yellen say? she said six months and that made it much earlier there was confusion. the dow jones news wires ran a headline that they'd be raising rates as early as this fall. there was confusion because she said something that people thought they were going to raise rates in the fall. >> six months later would put you into the middle of next week. >> so much for the honeymoon with her. the markets are ready to do anything at any time. you have to be very careful. >> it's dropped like 100 points. >> it was 180 at one point. i was skiing, looked at it and went, wow! >> we have headlines beyond the pumps this morning. >> by the end of the day. >> you weren't just using the -- yes, okay. >> let me tell know what you going on. president obama beginning a very busy overseas trip in the netherlands, there for a two-day nuclear summit. he'll participate in a g7 meeting. the president says he'll tell european leaders that it's important to make russian president putin understand the economic and political consequences of his actions. i think in the 6:00 hour or 7:00 hour he's been traveling a lot and that it cost $288,000 an hour to be on air force hour. it's $228,000. >> bargain. >> up $47,000 an hour from about a year or two ago. also, economists are turning a bit more optimistic. a new survey putting projected first quarter growth at 1.9%, an annual rate held back by severe weather. economists see growth. that is good news. federal regulators are reportedly looking into whether gm committed bankruptcy fraud in 2009 when it filed for protection from creditors. "the new york times" saying the probe centers on whether gm revealed enough information about the ongoing problems with its ignition switches that have led to 12 deaths. one of the questions, you weren't here last week, we were saying through the process, when gm did go through that bankruptcy and the white house was involved, did anybody in washington know about this? when they were looking through the filings and the documents and everything else? steve rattner was the car czar at the time. there were others that might have known. did this bubble up and rise to that? i assume this piece you're referring to has potential problems. >> has michael wolf ever said anything nice about anyone? >> what did he say about her? >> loves her. he says gm barra puts voiceless ceos to shame. >> he said nice things about roger ales not too long ago. >> you're kidding. wow, i underestimated. >> i love him. >> he's incendiary. >> because there's an underlying truth to everything he says. he says it sometimes he doesn't say it in the nicest way possible. he's come after me and others. there is something remarkably bright, ultimately i would argue, about what he does say. >> you feel some commiseratation. >> all true. all true. >> you talked about it in your column and book. >> i like to think it's true. sometimes i make mistakes, we all do. >> my final four. as the fed tapers its bond purchases will credit finally start to expand? joining us now, squawk master petish fisher. he is also a senior fellow at dartmouth college, which is -- we'll be in a death match with alan krueger. you're a cornell guy. >> former cornell. we both graduated if big red. >> senior director at blockrock institute and a maybe of aig's board of directors. professor alan krueger continues with us. can you help me? we were talking about yellen last week, peter. did she give you pause? anything she said that was new in terms of what we thought the fed might -- how they might react? >> i don't think so. i think they confirmed what i had been suspicious of all along, that the 4% long run fed funds rate, that they'd referred to in their releases was kind of a platonic ideal, not something they expected to get to very quickly. i wasn't sure they'd confirm that that soon. that was a little bit of a surprise. i think a positive one for the market. i think the market got crosswise on some of her words. i think the most important thing is that the fed has to be pulling back on the free options they've been giving away all these years. they've been buying that open-ended promise to buy 85 billion a month, 65 on down, 55. that's giving the market a huge free option. they'll keep pulling that back. that means vol goes up. they also have to pull up the free action that they'd been given away that tied their hands. they have to hold more options to fiddle with rates in the future. that means vol goes up. they confirmed that. the market responded a little bit. >> in the intro to talking with you, we wondered do we finally see some of this money, some of the balance sheet that sort of didn't go out into the economy. does that filing start to losen up? does credit get easier? as they're pulling back will it become easier to get credit? >> i think it will be. the only real mistake the fed has been making, unmitigated mistake has been to try to suppress the term premium and pull down long-term rates. that makes it hard for banks to make money. you saw how bank stocks reacted. they rallied. they make money when they can lend against a term premium. i think we'll secret start to expand as the fed stops holding back. that is what led to trillions of dollars of billions sitting idle on the balance sheets. >> let me ask you, peter, would you get a seven-year a.r.m. right now? >> that's a good question. maybe. i think the fed, as the fed signals, not going to be raising rates all that much. they may start it a year from now as chairman yellen implied. but that would be the soonest i think she was implying. i don't think rates will have to go all that high unless the economy accelerates a lot more. this has already been a five-year expansion. so i think people have got to realize, our expansion of our economy while it's been sort of too weak for our taste is also getting long in the tooth. >> that is a real question, because 30-year is much more expensive. people think it's such a deal to get 30 years here. but you can save so much money. if you knew about the seven-year, you could do it and not worry about it. there may not be a reason to lock in a 30-year. long term we may not get back to 7% -- i mean, that could take a while, right? >> i think so. i mean, the chinese economy is slowing down while the u.s. is doing pretty well. parts of the rest of the world look a little shaky. look at the geopolitical risks. a lot of things will dampen global growth. we can grow a little above trend for a while here. i think we're not going to revert to the high interest rates of the early 1980s. that's not going to happen. >> how long? >> that strikes me about right. i can see us growing at 3% for the next few years. this is an unusual recovery, even though it's gone as long as the normal recovery. it's followed a different path. housing took a long time to turn around. i think the recovery can have legs. we could see one of the longest recoveries, if not the longest that we've had. and i think the fed needs to keep -- take that into account as well, since it was not as robust as one would have liked. we could possibly make up for it with longevity. >> all right. how else can i get you here? i have an idea. >> okay. >> we always talk about the big battle between pimco and blackrock. have you gotten a resume from el-erian? is that a possibility at this point? he's a heck of a bond manager. what do you think? >> no. i understand he's got ideas of what he's going to do. i haven't spoken to him. i'm not going anywhere near that. i get my health insurance from dartmouth now. >> what do you make of the tumult at your biggest competitor at this point? are you enjoying it? are you there but for the grace of god. >> there but for the grace of god. three or four years ago we had turnover among our senior portfolio managers and fixed income. i got kicked around the shin for that when i was running fixed income. this stuff happens. you get turnover. clients don't like to see turnover. i feel sorry for them. i don't have any gloating here. i got my scar tissue from that kind of turnover before. >> you saw this again, at "the new york times." they can't do enough. they love this. what is it? it's weird, isn't it? growth has the greatest record and no one's come close over 40 years. >> people love an internal drama. >> they do. they like to hear about personality traits. >> you're all perfect at black rock, correct? >> i'm not going to touch that. >> that was a good, honest answer. >> layry fink is the greatest investor and manager ever to live, i think, peter. you'd agree with that, right? >> not going to touch that one either. >> oh, come on. >> anyway, thanks, peter. >> great to see you guys. >> alan will be with us for the remainder of the show. >> we can talk to him about krugman as long as we're putting people on the spot. >> we could. >> you are not paul krugman? >> i have not. >> you've gotten his mail. >> i often get his mail and vice versa. >> krugman is leaving princeton in a year. >> a year and a half or so. >> i would say his mail is often quite heated. >> he's a complete demigod to the left, though, he really is. he almost walks on water. and then on the other side, he instills the same -- the opposite from the other side. >> i think he's a bit of a lightning rod. he was certainly an outstanding economist in his prime. >> in his prime. oh, man. man. >> which was 1981, i this i, wasn't it? >> no. he was a participant at this brookings meeting i went to last week. >> okay. all right. all right. alan will be with us for the remainder of the program. when wep come back, biotech sent into a tail spin after congress sends a letter to gilead sciences after pricing for its hepatitis c drug. as we head to break, check out the "squawk box" market indicator. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. ♪ [ male announcer ] a car that is able to see, to calculate, to think -- and can respond to what it encounters. ♪ even if that means completely stopping itself. it's the stuff of science fiction... minus the fiction. the 2014 e-class. see your authorized dealer for exceptional offers through mercedes-benz financial services. see your authorized dealer for exceptional offers peace of mind is important when so we provide it services you bucan rely on. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next. biotech stocks took a hit on friday. the energy committee sent a letter to the ceo of gilead, asking for a briefing of its hepatitis c drug called sovaldi. reports indicate that gilead intends to sell this drug for $84,000 per treatment. this letter ignited a sell-off in a slew of biotech stocks, if fears of more scrutiny on pricing for the overall sector. joining is now is christopher raymond, senior biotech analyst. you look at what we're trying to do with health care and the affordable care act. b biologics have always had a target on their back. is this something new or should we expect this kind of stuff? >> thanks, joe. i don't think this was different. clearly you'll see folks taking a shot at a high-price the therapy. i think what that sentiment ignores is the value that a higher price therapy delivers. >> we hear that argument a lot about pharmaceuticals. you hear it's the best bargain in town compared to a hospital stay or surgical procedure. if you can do preventive or wellness type therapy. beforehand, you feel that's a much better way to go. you say that is true? >> absolutely. there's examples up and down the industry where, you know, absolutely, if you've got a drug that keeps patients out of the hospital or perhaps more importantly, keeps them alive, you've got a pretty decent value proposition. >> how do you win the pr battle if you're a drug company or a biotech company? where you see something that i remember -- what was it, that one drug. >> genzyme. >> 300 or $400,000 a year. they try to say it costs this much to develop it and we need to recoup our investment but it's unlike anything else when you can look at what the margins actually are. how do you win that battle? it's an easy target for saying you're gouging people in need. >> it makes an easy target for politicians or folks. i think the more important constituency here are payors. there's examples up and down, for example, europe, alexion has their own very high-priced drug. they take it on the chin on friday worse than any of the large caps, yet they're in the midst of a new product cycle. a single payor system in every country. they're winning that battle every day. >> at this point how would you say this is going to play out? there's no doubt that there's going to be some collapse in some of the margins for biotech and pharmaceutical companies. it just has to happen, doesn't it? >> well, if you have an scree that's innovating and we've been tracking biotech, gross margins for 15 years now. >> this affordable care -- are these scare tactics that we're hearing? you're not going to get certain specials, the pressures from medicare are being cut back, that it's going to affect a lot of what people are allowed to actually get. it's just bound to happen. is that not true? >> well, i think if there's a mechanism in place to systematically do that, you have to be worried. the issue right now is these things are headlines. there's no system in place with the u.s. health care system to do that. until we get that, i think this is just headlines. >> okay. your favorite stocks, did we just show some of them? what should we be buying? >> our favorite large caps would be cellgeny, alexion, regeneron. absolutely. >> appreciate it. you're in the large cap space. thank you. >> thanks, joe. kermit the frog and company had a rough weekend at the box office. big news from bmw. this is a surprise, actually. phil lebeau at south carolina at its assembly factory, a closer look at why the german automaker is expanding in the u.s. and not in its home country. we'll be back with that story and a lot more. so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line, anytime, for $15 a month. low dues, great terms. let's close! new at&t mobile share value plans our best value plans ever for business. welcome back to "squawk box," everybody. the movie "divergent" dominating the weekend box office earning $56 million, the second highest opening so far this year. 300 rise of an empire holds that title. as for the "muppets most wanted" landed in second place. it made $16.5 million in its debut. >> what movie studio did "divergent"? >> i think it's the same one that did "the hunger games." lion's gate. >> not nbc? it's not -- >> why, you want to trash it? you want to know first? >> went from "sense and sensibility" to this? >> they can make some money on this. >> that's such a career path, emma thompson. >> you go in for a $10 million payday in between the 2 million and 3 million. >> "divergent"? >> you know what happened to owe we one -- obi-wan kenobi. he was the only well known classically trained actor in "star wars." they couldn't pay him enough money. it was the stupid science fiction. they offered him 1% of the gross which turned out to be a bazillion dollar. >> hans solo made my pulse race. >> yours, too? >> yes, yes. coming up, could the fed be forced to hike rates faster than you think? steve liesman will join with us that story, next. as we head to break, take a look at u.s. equity futures. 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[ camera shutter clicks ] ♪ a better web starts with your website. create yours at squarespace. ♪ create yours at squarespace. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. welcome back to "squawk box," everybody. yelp was upgraded to outperform to market perform. the online review site is positioned to enjoy continued strong revenue growth as well as margin expansion. jcpenney says it does not expect materially adverse impact from its ongoing legal dispute with macy's. macy's sued martha stewart living and jcpenney. macy's settled with martha stewart. and coca-cola is in a dispute with wintergreen. that firm sent a letter to coke's board saying it was disappointed in coke's 2014 equity compensation plans for executives. coke says wintergreen is misunderstanding how the plan works and it is tied to achieving specific business goals. these are big numbers. at one point we looked at $13 billion. >> the letter says $24 billion. >> i think 13 billion was the amount at today's prices. maybe 24 is where they expect that stock to be in four years. he negotiated a deal for 2% of the gross royalties paid to the director of "star wars," george lucas. he was a classically trained actor. he said he'd sign on only if he didn't have to do publicity. in a letter to friends he called it fairy tale rubbish. he made a fortune off of the deal. >> look what george lucas made on that. he's a billionaire a couple times over. >> he was able to sell the franchise, selling it to disney. the houston ship channel remained closed as cleanup from an oil spill continuing. skimming boats are working to clean up thousands of gallons of oil spilled from a barge that collided with the cargo ship. the shipping channel delivers crude to more than a tenth of the nation's refining capacity. check out the price of crude. $99.95 is the price right now. for more on the economic pulse, let's get back to alan krueger. steve liesman at the table. >> alan, as you've been talking about, his work may have more influence on when the fed hikes rates than anybody out there. the biggest debate over fed policy, when they will raise rates. that depends on when the employment and inflation rates return to normal. alan's work suggests not as much slack as you think. as you discussed in the last hour, his work shows the long-term unemployed may not be coming back to work. they're exercising downward pressure on inflation. here's one of the charts that alan presented last friday at the brookings thing. i just did a little work on it. 30% of those unemployed after 15 weeks -- >> months. >> sorry, 15 months. that's a mistake. 30% are unemployed, 32% not in the labor force. only 27% are unemployed of which 11% are full time. your point here is this, there's not a lot of slack in the labor market. does that mean the fed has to move sooner than you think. >> i'd make a distinction between analysis and fed policy. the analysis suggests we face tremendous challenges with the long-term unemployed. even a year later only 11% have come back to steady, long-time careers. they've become more isolated. they become more discouraged. i think manufacture the long-term unemployed are effectively on the margins of the labor force or effectively out of the labor force. and they have been searching for a job because that's a requirement for extended unemployment benefits but those benefits have stopped. >> right. >> what is a fiscal problem. i aids problem for the administration and congress, not necessarily for the fed. i think becky was making that point in last hour. on the other hand they have an influence which is if they don't represent slack in the labor market and you know they are not exerting downward pressure on wages then maybe the fed has to move sooner. >> well, if i were the fed, which i'm not, and i spent four years not commenting on the fed. it's somewhat liberating to be able to give my views. >> right. >> i would wait to see signs of inflation. we have been well below the 2% pocket for quite some time. inflation is determined by many factors, not just how tight the labor market is, energy prices and so on. i think we can with stand reaction. i'd wait to see sure signs of inflation, not get out ahead of it. >> can i move the question in a different direction? i hear the president constantly talking about mobility problems in this country. this goes to the american dream issue, this goes to larger employment issues yet we were talking during the commercial break that emanuel saez argued that mobility has not changed in this country over the past 30 years. where do you come out on that? >> and what some of the numbers that steve is talking about and how that relates. >> i think it's a longer term problem that we don't have enough mobility in the u.s. if you look at the chans of moving from the bottom 10%, bottom 20% up to the top 10% or 20%, it's quite low. interestingly, they find over the past 30 years or so it's been relatively stable. the big burst of inequality that we saw occurred in the early 1980s. they mostly missed that period. it's hard to know how that affected intergenerational mobility. my concern is what happens in the future. and we have had such a big divergence in terms of income growth in the u.s. children from high income families have many advantages, which is wonderful. children from the low income families have many disadvantages. the luck of who one's parents are today matters much more than it has in the past. >> you think a decade from now if we were to revisit these numbers, the situation on mobility will be much, much worse in part because of the employment issues steve is talking about. those people are not going back to work and you'll have a larger problem? >> even if mobility remains unchanged we'll have a problem because of the tremendous divergence. the gap between the children born and the bottom of the children born and the top could still expand even if mobility doesn't change. >> one of the questions came up, alan. they're not eligible for unemployment benefits. they seem to drop out of the work force -- what was it, 30% drop out of the work force entirely. 30% are unemployed. who described it as the cramer lifesty lifestyle? they seem to get by but have no apparent form of income. >> that was me. >> we've had a downward trend in labor force participation prime-age men for quite some time. it's very hard to figure out how they're supporting themselves. disability insurance is part of the explanation but it's only for a small minority. many are relying on their families and parents. they're sliding by, under the radar screen. >> we talk about the long-term unemployed as part of the clock of the work force. there are other pieces to that, though who have dropped out of the labor force entirely, 1 million. would you say there's other pieces of slack that are significant? >> absolutely, you have to look at the full picture. in addition to part time for economic reasons i would look at overall work hours which have been edging back to normal effects of the wedge. many of those who have been out of the labor force, are going to face the same problems as the unemployed, difficulty getting back into the labor force. >> the short-term unemployment rate is back to normal. >> yes. >> the fed may be done in this realm. it did what it could do. >> it's too broad. it's not the same radiated -- like if you're trying to deal with a problem, you want a pinpointed way of doing it. that seems like a much better fix rather than a broad flood the market and have to worry about what happens down the road. >> that's right. if congress doesn't act you have to use the tools we have. >> should the fed be doing congress's job if they're not there to do it? >> did you do a bracket, liesman? >> i did. >> how are you doing. >> i think it blew up before the first game started. >> what am i supposed to do? stuff just happens. his final guy is gone. three out of the four teams in the final four are all gone. >> it's so embarrassing in front of my teenage boys how lame i am at this. >> it's hard to do. >> it's exhilarating. >> he knows how to write insurance, he does. >> steve, thank you. still to come, bmw expanding in the united states rather than in germy but why? phil lebeau with a preview of that story. >> reporter: we're in spartanburg, south carolina, where bmw makes the x models, the newest one, the x4 starting to roll off the line. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. 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(all) great! i love logistics. the all new bmw x-4 is rolling off the assembly line in spartanburg, south carolina. the luxury automaker making big profits from their made in america suv. he always has those glasses on. he has to be there with that story. hey, phil. >> reporter: you have to have the glasses on. if you don't have the grasses on you can't be on the assembly line. these are x3s behind me. if you look closely, you might see an x4. why are we here? they continue to expand production here in spartanburg. all of the suvs, x lineup comes from here in spartanburg. what a lot of people don't realize, 70% of the models that are built here will be shipped overseas, including many to china. >> it's really enjoying a worldwide demanned, constantly clowing. i'm quite positive about the future, of that plan. i think we'll see further growth. >> take a look at the production, how it's grown here in south carolina. 2008 they made about 160,000 models. 2012 up to 240,000. this year they're build 350,000. don't be surprised if they're well over 400,000. >> there's no doubt at some point bmw and south carolina could be the largest location for bmw production anywhere in the world. >> let's take a look at how luxury auto sales went in the u.s. last year. bmw relinquishing the number one crowd to mercedes, still selling more than 300,000 vehicles in the u.s. there you see lexus at third. take a look at shares of bmw over the last year, up 28%. the auto industry as a whole really had a very solid year for investors in 2012. we'll be on the line all day long. we will show you an x4 that's coming down the line. they're just starting production, a big deal here. coming up, what investors will need to watch this weekend. the markets. jim cramer joins us to talk stocks and sweet 16 when we return. make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. welcome back to "squawk box." take a look at the futures right now, see how the market is setting itself up ahead of the week. dow jones looks like it will open up 31 points higher, s&p 500 up 3 points and the nasdaq up 6.5 points. joseph. >> let's go to jim cramer at the new york stock exchange. every time i think i want them to legalize gambling on sports, you know, because i could kick some ass, i think. then we do this with these brackets. please don't ever do that. i don't want to be able to bet on games. you know what i mean? it's impossible, isn't it? >> not only is tim possible but you better have someone you're with who likes basketball. it is nonstop. you're switching and -- some of the stations, it was on trutv. where the heck was that on the dial? directv. channel 8,433. you couldn't even find it. >> didn't you say something about baylor? that shows you are a genius. didn't they start out 2-5. >> at one point they had a 12-2 streak. i have florida, virginia, baylor and louisville. i'm still alive. >> number three in the espn celebrity pool which is 13,000 people. >> i'm kind of in there. >> wow. >> i have three out of four left. >> all right. you're alive. being alive in this thing is really quiting. >> it is. how many games -- did you see a few? >> i watched seven. >> every minute, right? >> plus every bar i went to had to have it. >> my kids have heard cuss words from me. they jump. i see things that are just not fair. >> there was a last-second discrepancy that cost me badly. >> if you looked at it, they started the clock way off -- you saw how quickly roy williams, he didn't argue at all. classy guy. no argument. >> i would think this thing to be the mistake heard round the world. he ended it himself. yesterday was remarkable. the way virginia dominated and baylor dominated, these are powerful clubs. >> wichita state, they were not overrated, i don't think. >> i totally agree. they did have gumption. iowa state, can they come back? >> uconn. nova. >> shahbaz. >> that is going to be -- i can't wait for that. i just looked it up. it was at 7:27 friday night, i think. >> shahbaz, didn't you think he was going to the hospital, instead he's back. >> he had shin problems. it looked like that was painful. these guys fall on their head from above the rim and they're still in the sixth row. this makes nba basketball look like wrestling, like wwe. >> right, right. greatest athletes in the world. how about the market? a good week you think? >> you did the biotech piece, the one that's most concerning me. you have the seasoned biotechs doing well and then waxman reads me a letter. you know this stuff i worry tha connect the dots between what you charge and what it costed to make, sooner or later political pressure is going to be brought to bear. you will have sort of help from the media in saying you cannot justify a $300,000 a year drug. you can't do it. the affordable care act will cause these things to come down and i think it will hurt innovation. >> i atotally agree. a lot of the drugs, health care, insurance company welcome it because the cost of the insurance, taking care of the patients, is far more than the drug, so i think you're dead right. innovation -- all of these things depend on that price structure or they would not do them. wouldn't develop them. >> biologics have gotten a pass, and sooner or later they will be a target for to try to bring down -- >> a lot fewer side effects, more expensive -- >> $85,000. >> 50% versus 95%. >> what does it cost to make? if it costs $600 to make you're charging $85,000. >> profit margins there some are a billion, 2 billion to get it through to where you get a test. >> right. >> it's not unusual to be a billion dollars. who would spend a billion dollars if it's not going to get a big pay-off. >> every success story you have seven or eight failures along the way. >> exactly. totally. >> yeah. playing devil's advocate, that's what you heard from people who want to hold costs. you see them doing this in europe. >> some companies won't sell their drugs in europe as a result. >> jim, separately, have you looked at coca-cola and the issue over compensation? >> is this the beginning of activism at a level at a company warren buffett will tell you is best in the world? very bad underperformer. this soda business itself is horrendous. everybody knows it. coca-cola -- only guys doing well, dr. pepper, inferior group of brands. watch this. coca-cola's fallen out of faber with money managers. this reminds me of microsoft when someone starting to agitate, people said you'll never be able to take on a big company like that. this is the beginning, watch this. this is the most important thing that happened. >> do you understand, we were trying to figure out $13 billion, $24 billion? they say coke ka cole lapse response, response for hitting certain price targets. is this excessive compensation to you. >> a company they are doing a huge amount of international business. remember jim stewart's column, domestic is bad, but they are hitting targets overseas that i see justify that level of compensation. but in the end, the category itself is so challenged, i think that -- they're going to look back and say, what are we paying these guys so much for? >> $13 billion and then $24 billion number. 13 is the new amount with which is added, if you combine it with the previous awards that will, of course, be exercised or will vest, in total, talking about $24 billion. >> how many people? hundreds and hundreds? >> assuming it's hundreds. >> it's not three or four people. >> no. >> no. >> i think when sandra bullock was able to make herself cry. >> for $70 million. that's 70 million. i think you should -- >> 10 million on the lean. >> you can get me to cry. >> you can get me to cry every morning. >> which ta, anyway, i can cry, too. >> i cry every morning. >> don't play into that. do not. you are so -- your self-esteem -- maybe it's your ego, so untouchable, so untouchable, sorkin. you have a showtime pilot. you -- >> you are so untouchable. false humility. thanks, jim. see you in a couple of minutes. >> when -- >> no one's buying it. >> alan krueger on the economy and the markets. stay tuned to "squawk on the street." co-founders of warby parker. weekdays are for rising to the challenge. they're the days to take care of business. when possibilities become reality. with centurylink as your trusted partner, our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs. every day of the week. centurylink® your link to what's next. impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. with investment information, risks, fees and expenses on my journey across america, i've learned that when you ask someone in texas if they want "big" savings on car insurance, it's a bit like asking if they want a big hat... ...'scuse me... ...or a big steak... ...or big hair... i think we have our answer. geico. fifteen minutes could save you fifteen percent or more on car insurance. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. enxer prizes, china fined $500,000 for illegal product sales and misleading local consumers. nu skin says it's correcting issues involved and isn't aware of pending actions. the stock's up $21. sure that's the news? i don't understand that, do you? >> maybe the stock was down sharply on the concern about china stepping in. >> then 500,000. >> maybe the fine -- >> it doesn't look like it was down. >> less than expected. a slap on the wrist. huge concerns china would do something more? >> really? >> yeah. they halted trading in the middle of the day when it was first coming out. back to our guest host, alan krueger. in terms of where you think the u.s. economy stands now, you think this could be a very long recovery period, we have a lot of years left? >> i think that's right. if you look, average recovery lasted five years in postwar period but no tendency for chance of recovery turning into a recession growing over time, it's one in five chance each year. i don't see signs of bubbles at moment that could take this recovery and turn it into a recession. >> if you had a biggest concern, one thing that you think could trip it up, what would that be? >> for a long time, we've been worried about the situation in europe. i think they're still not out of the woods. we have very strong financial connections. but there's always risks that you're not aware of. look at geopolitical risks in ukraine. so, i think something can certainly come out of nowhere which affects the recovery. >> do you ever remember a time in the past where someone was asked that question and came up with something and it was actually what did cause -- i don't think it's every happened, has it? >> roubini did well. >> he did. >> he's been dark for a while. >> when was the last time he did something well? almost laughably wrong. negative 666 on the s&p. nothing about stock market investing. >> in general, it's best to go with the median forecast. that has the best forecasting ability, does better than any individual. what i do, i look at median and shade it towards my own direction, and stick with that. >> the seeding, like one, two, three, four, five, is really good. i've realized that now. if all you did was go one -- >> no. >> a couple times you get wrong. twos always beat 15. >> i picked the higher seed almost every me. >> you're in sixth place, becky. >> two left in the final four. >> that's a problem. my fault. >> you discuss the brackets. i'll thank alan krueger. say hello to mr. krueger for us. >> "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at new york stock exchange. faber is off. final full week of the quarter. futures up,spite disappointing flash pmi out of china, eight-month low. plenty of data. fed speak on the calendar. europe slightly in the red. road map going to go like this with the markets set to open higher, despite the disappointing chinese data. as often is the

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