the chief executive and the bank's cheryl have both come under pressure from swiss politicians to resign. $2.5 billion is coming from shareholders. the officials are accused of stealing american trade secrets through cyber espionage. beijing summoned the u.s. ambassador to china and says its military has neveren gauged in cyber spying on businesses. eunice yoon will have more from beijing in just a few minutes. thailand's army declared martial law nation wood today. the army denies it is staging a military coup, saying the goal is to restore order after six months of street protests. the caretaker government maintains it was not informed about martial law in advance. the u.s. says they are monitoring the situation in thailand closely. we have a couple highlights but hg, home depot, out with earnings. >> the stock is moving around a little bit. the number itself before we look at the chart is $1. the company earned $1 a share. the estimate was for 99 cents. that is a little bit above. the revenue estimate was 19.951 billion. and the sales number that the company released is 19.7. maybe that's just a shade light. it raises its fiscal year view to $4.42 which is by coincidence the number that the street is looking for already. it's at 4.42 and they raised it to 4.42. the same-store sales number in the first quarter was up 2.6%. 2.6%. u.s. same-store sales up 3.3%. and it also re-affirms fiscal year sales. it says re-affirms. maybe they've affirmed it one other time or maybe not because people misuse that word. they're re-affirming fiscal year sales up 4.8%. the stock right now, it's a big spread, 76.45 bid and 79.17 ask. i think it's pretty amazing. we talk about walmart sales. we know the guys that founded this company. it wasn't that long ago. they sell $20 billion worth of stuff in a quarter. which sun believable. >> not blaming too much of the weather, though. fla frank blake said we had solid results in nonweather impacted markets and expect our sales to grow in line with guidance as we previously provided. >> you would think with home depot, obviously, you can't do as much construction. but there's times when there's other stuff you can do. >> causes you to do construction. >> spring is a tricky one. they sell so many things in the garden center. if it gets off to a slow start, that can have an impact. >> she thinks home depot, she thinks gardens. >> the last time i was there a week ago was for that. >> the two of us with our pickup trucks and hammers. >> as handy as we are -- >> i was there a week ago. >> handy is a turn-on for a lot of people. which means i would never get any if that was the -- you know what i mean? >> pretty much. i do know. >> anything beyond a lightbulb -- >> you actually screw the lightbulbs in yourself. >> i do. do you know how many of me it takes to -- wearable cameramaker go pro, joe was mentioning this earlier, is going public. the company targets surf, ski and other sports enthusiasts. look at this. joe was asking some questions about go pro. it's those little cameras that people attach to their heads, put them in different places. you can see great images on the screens awe're talking about it. they plan to raise up to $100 million in that ipo and list on the nasdaq. the company's founder and his family are the biggest stock holers with a 49% stake. >> how did that -- >> they attached the go pro to the dolphin. >> did you see on the helmet? >> that's the camera. >> my ski helmet had that on. >> i got one last summer. you can go cool stuff with the kids. >> it's an amazing device. we will see what that does. >> i think the stuff andrew has done with it has not involved kids. hopefully they're not around when you're -- right? >> what are you talking about? >> never mind. >> i bet people have done things like that that i haven't thought of until now. our audio guy is not here. >> the music would be playing loud and clear by now. you should keep an eye on shares of urban outfitters this morning. >> it's a whole subsection. >> oh! >> it's a whole subsection. >> i can't believe you just went there. >> isn't that what you were -- >> yes but i wasn't -- >> you knew exactly what i -- >> i did. >> what are you talking about? >> little lady, you just sit there. >> better for you not to know. >> don't you have a story coming up? >> i wouldn't worry about this. this can only go to a bad place. >> it's already there. what time is it. >> 6:06. >> that's later than usual. urban outfitters posting lower than expected quarterly profits. the company spent more on marketing. microsoft is holding an event in new york today. among the rumors, a new chip for the surface tablet or perhaps a mini version of the device. today's event comes as growth in tablets slowed for them. it slowed forever everybody we should probably say. in washington news, it's super tuesday, which for me is every tuesday. right? where we are in life, what we have, the blessings. >> i agree. super tuesday, super monday. >> super tuesday. it's a mini version of what other people mean by it. that is in that six states are holding primaries. kansas, georgia -- >> arkansas. >> georgia, idaho, illinois, kentucky, oregon and pennsylvania. john harwood. john harwood. is that what we need, super tuesday to see harwood? >> wait a minute. he comes on with the poll and some of the other things. >> what does he do when we don't see him for a long time? >> he analyzes the ratios. >> like what? what other shows? >> of course there are none, right? >> i don't know. he has a pretty -- i'm not just saying. he'll join us in the next half hour, make an appearance. and have details on key races in the major political story lines. let's check on the markets this morning. yesterday turned out okay. the markets heading up, looking down about six points or so on the dow. home depot at this point is still -- can't really tell if it's going to do anything. if anything it was pretty much in line with that. pretty flat. we'll see what changes as we move ahead into the -- get closer to 9:30. check out the oil, the ten-year, the dollar. see if anything is happening. there's oil. nothing is happening there. it's above 100. ten-year at 2.539. a quick look at the dollar board versus the pound, the euro and the yen and finally -- i haven't even looked at gold. not much happening in gold, just under 1300. china lashing out at the united states after the indictment of five chinese military officials on cyber e espionage charges. let's go to eunice yoon in beijing. this is a big story here but i imagine it's an even bigger story where you're standing. >> it's a massive story over here. china is warning the u.s. now of retaliation. there were several government departments issuing separate statements about these charges. the foreign ministry said these charges were absurd and they said they were fabricated. the defense ministry said these accusations would hurt the military-to-military relationship between the two countries and said they have ulterior motives and even the internet office, an office here that governs cyberissues said that the u.s. is a thief that just is calling others a thief. in other words, they are saying that the u.s. is one big hypocrite. because from china's perspective, america is also guilty of cyber spying. the difference that the u.s. government has been trying to make between cyberspying in order to steal trade secrets versus plain old-fashioned siper spying government to government has been lost on a lot of the people here. that's one of the overriding feelings among the public, that the u.s. is being incredibly hypocritical. that's one of the reasons why these five military officers have been hailed as heroes here by many people in the public. >> eunice, one of the huge questions is that distinction that you just mentioned, the idea that in the past, many nations, many of the industrialized nations had recognized they were spying on each other but there was never spying corporate espionage, going in, stealing corporate secrets that was sponsored by a state. you said it hasn't been a decision that's been -- a delineation that's been recognized there. do you think is something that will pick up steam? or after everything that's happened with snowden, is that too difficult of a comparison to draw? >> i think it's difficult at this stage. america has lost credibility when it comes to cyber spying. maybe if the u.s. is able to continuously get its message out and try to really make that distinction very, very clear, it's possible that people here might be able to understand it. as of now, that delineation as you said, the line in the sand is completely lost on the chinese public. again, most people here have just been saying that the u.s. is completely hypocritical, china feels itself is a victim of cyber spying. today we heard from various government departments that the u.s. actually has been one of the worst offenders for china's -- china itself. that's one of the reasons why. i think it would be difficult. one of the reasons why you can see the relationship has come under tremendous strain and this comes only after a week ago when u.s. treasury secretary jack lews with here. he was trying to get economic reforms faster. we've also been hearing from the white house about their support for some of the neighbors of china and china hasn't really been happy about that in its efforts to try to, you know, in territorial disputes around this region. so what china is seeing from their perspective is a much more confrontational united states than they have seen in the past. there's been a lot of discussion here as to what is actually driving that and whether or not it's just that maybe america or maybe u.s. companies have been fed up with the fact that as china is continuously rising in power and it's taking its seat as the number two power in the world, that perhaps it needs to also really get used to the idea that it would come under criticism and has to play on a different playing field. >> eunice, the question is right now chinese officials are lashing out by making a lot of big talk about things. what are the other potential ramifications from this? is there anything that's come up specifically? >> well, specifically today they did -- well, today it was reported that they had called in the u.s. ambassador to china, max baucus. this is probably going to be one of his biggest tests. he's only been here for a couple of months. they did call him in. they did call him in to lodge a protest about these accusations. they also said they were suspending the working group that the u.s. has with china on cyber security issues. they said they're going to retaliate and that they are going to take more action, but their hands are tied as well. what kind of reaction can they really take on economic issues that would be so serious because this relationship is so tight? >> okay. eunice, thank you very much. we appreciate it. >> baucus. i didn't realize that. >> the new chinese ambassador. >> not bad. not bad. he was cushy. >> although here's your first assignment. >> most of that is hey, how are you? >> i would like to be an order. i would like to be an ambassador. wouldn't you like to be an ambassador. >> i like it here. >> he gave a graduation speech yesterday. i was watching -- i'm sorry. at 6:00. it's really a good balanced -- i mean, it's not one way or the other. it's really good. i was watching. anyway, they show jack lew talking about we're coming into an age of bipartisanship where some things can get done on immigration. he goes, it hasn't always been that way. remember we passed the affordable care act. he said that with a straight face. zero republicans on the house -- zero republicans in the senate. it was funny that he referenced that when he was talking about bipart sanship. >> where was he speaking. >> georgetown, i believe, his alma mater. >> was it a good speech? >> i didn't listen to the whole speech. i just saw that part. i'm not going to make any references to how interesting or how good the speech probably was. i'm not going to. >> you're free to do that if you want. >> i haven't seen it. home depot did sell hd supply at some point. there's a 4 cents gain. if you take that out, it's 96 cents. the estimate would have been 99 cents. they're also saying that 3.3% same-store sales that the company was used to delivering more. they said 4.42 for the year. joining us on the "squawk" news line is brian nagel. the stock tried to move around a little. it looks like it may open unchanged today, brian. any surprises. >> i think weather is the big factor. the market will wait to see what the company has to say on its conference call which will be 9:00 eastern. they'll give more sales trends in the quarter. >> the blake era has been profitable for shareholders but it's stalled in the last year and a half or so. how should we look at that? the market is having trouble making headway as well. >> well, i think right now i think there's a disconnect between home depot's fundamentals in the stock price. i'm talking to our clients out there. i think home depot shares are having a difficult time finding that incremental buyer. there's a lot of concerns in the marketplace about weather, housing and such. my view on home depot is once this clears, i think we'll see better results over the next couple quarters, i think you see that incremental buyer. stocks move to the upside. >> how does it respond to what is a different housing market that we have right now? a lot of multifamily, a lot of investment buyers? not necessarily first home buyers. is it a head wind or are we starting to see things where home depot will be in a sweet spot based on the overall housing market? >> good question. i think -- my view -- >> really? >> housing is a mixed bag right now. for me, the data point of the factor that's probably most important for home depot right now is home price appreciation. what that does, as home prices continue to climb, that gives that homeowner the confidence to re-invest in their house. that's the biggest factor. now, at some point we want to see better housing turn. as i look at the housing market right now, i think the how'sing market has been dealing with a lock of supply. a lot of that has to do with what you mention. you had a lot of suppliers come in and snap up the supplies. home prices are probably the key factor right now. we've seen a nice trajectory. >> you'd buy home depot. do you like it better than lowe's? >> they tend to be the same stock at this point. the answer to your question, i'd be buying it here. we'll see where it opens up. it looks like it will open up flat. i think home depot sets up well in the next couple quarters. >> everything i get at home depot i can get at lowe's and vice versa? becky likes the garden area of home depot. >> categories wise, they're basically the same. >> i should tell you we have a science fair project we're working on, a high dydrotonics >> we're in power tools, sheet metal. >> power tools. >> metal working, welding. >> you do welling? good for you. >> both of us when we -- less so for you? how many hard hats do you keep in the house. >> a couple. >> thank you, brian. >> my kids have them. >> the yes meter is off the -- right. >> my kids have construction outfits. >> who is that little guy? >> bob the builder. >> halloween costume is what it really is. coming up -- i don't like the term denier. i think it's loaded and i don't like it. i think it should be saved for really important stuff. but it's alled all the time. there's a denial that the middle class has actually done okay the last few years. we'll look more closely at the numbers. we have that in today's executive edge. later, dr. oz is making a house call. he'll join us on set to talk about brand building. then we'll pepper him with serious medical and fitness questions like what happens when you do a cleanse? what is that, a shower? >> no, no. >> all right. >> also if you pull a nose hair, he'll tell you what happens. >> no, no, no. >> i'm anxious to hear it. >> can't you get encephalitis or something? >> i don't know. i'm going to ask him. >> or unless you get less than six hours of sleep. >> the new york rangers unbelievably fended off what was a swarming canadian team and ended up winning 3-1. lundqvist, king henrik is inspirational. the canadians had their third stringer in or something. the rangers up two games to none in the best of seven series. "squawk box" will be back in just a minute. we've all been talking about it. i mean, andrew, we talk about it all the time. income and equality. a lot of reports, commentary about income and equality, the demise of the middle class. we talk about it all the time here. yesterday i was groping for the article i had seen over the weekend when christian weller was here, saying that nothing we're doing until we deal with this, that growth won't even do this. we tried the system and it isn't working. i pulled the article that i saw from a professor named neil gilbert. he's a professor of social welfare at berkeley. i think he's walking around incognito. he wrote an opinion piece for "the wall street journal." these are opinion reports that the cbo did in 2011 that shows that average disposable income. when you divide them into five equal groups called quintiles, it reveals that the average disposable income is up. it's up 49%. the average household it grew by 40% for the middle quintile. now, here's something that will play into the argument. 201%. >> people who own the assets have done much better. these are inflation adjusted. even the lowest quintile. the other thing that you forget is in 1979 if you were in the lowest quintile, it doesn't take into account how much mobility there is. 58% of the people move up, moved up in that period. one last thing he points out, what about other countries? in italy, in this country we're still 25% more disposable -- 38% more disposable income than italy. 25% more than a family in france. 20% more than a household in germany. so it's not as if -- and then these are developed countries. to be having the argument is strange. he makes one last point, americans have long accepted inequality as a necessary consequence of our system which rewards ma s merit, productivit often luck. the process gets distorted if there's discrimination, exploitation or larceny. it also needs to address the playing field so it's not luck. >> what's interesting about this, he took his information from the congressional budget office from the report you mentioned in 2011. the reason the other narrative exists that the poor have gotten less wealthy, that have gone along with those things, all the other information looks at income. it doesn't take into account taxes, welfare, transfers from the government that come back. the cbo looked at a much more complete picture. >> when i was looking at this and googling it, the left went bonkers based on anyone that uses that cbo report, "new york" magazine. >> cbo is bipart son or supposed to be nonpart son. >> they call them deniers. the latest deniers of income inequality. people love to use this denier term. >> this is cbo, looking at straight numbers and trying to take into account what happened. >> they would say you shouldn't use the -- because it takes into account taxes. it takes into account social benefits and things like that. >> one point, though -- >> i finished so i'll let you make -- >> i'm not disagreeing with the point. i think there's no question if you were in the middle class, you're in a much better place than you were there. the question becomes, "a," why did the inequality -- >> they own the assets. >> what is the remedy is the question. >> what is the remedy, should there be a remedy? is it a problem? we talked about what it means to be poor today is different in that there is so many things you can buy that are cheaper. >> does profitability continue to exist? somebody who was 25 in 1979 probably jumped two classes along the way. does that mobility still exist? >> it's not necessarily about making sure these people have less. it's about jobs. it's about growth and jobs. >> and education. >> you have to get the education to make sure you have an equal playing field so you have a chance. >> coming up, a rare in studio appearance by john harwood. he's going to talk us through the big -- he's going to be right here. in studio to talk us through the big races that could shift the balance of power in the midterms. at 7:00 a.m. eastern time, a rare interview. i think this may be the first one i've seen on tv in a long time. chris flowers, a key player back in the financial crisis, he had a seat at the table during many of the big negotiations. we get his read on the banking system and the fall of mf global. first, take a look at yesterday's gainers and losers. true business-grade internet comes with secure wifi for your business. it also comes with public wifi for your customers. not so with internet from the phone company. i would email the phone company to inquire as to why they have shortchanged these customers. but that would require wifi. switch to comcast business internet and get two wifi networks included. comcast business built for business. mayo? corn dogs? you are so outta here! aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. nutrition in charge™. [ bottle ] ensure®. when folks think about wthey think salmon and energy. but the energy bp produces up here creates something else as well: jobs all over america. engineering and innovation jobs. advanced safety systems & technology. shipping and manufacturing. across the united states, bp supports more than a quarter million jobs. when we set up operation in one part of the country, people in other parts go to work. that's not a coincidence. it's one more part of our commitment to america. good morning and welcome back to "squawk box." here on cnbc, i'm joe kernen along with becky quick and andrew ross sorkin. making headlines, home depot earned 96 cents a share. 3 cents shy of estimates, revenue light. the retailer's spring selling season got off to a slow start. european union antitrust regulators are charging hsbc, jpmorgan and credit agricole. that's what i remember from four years of latin. they charge these banks with rigging financial benchmarks linked to the euro, six other banks, were hit with a -- external aud i external audits found more than twice as many are found by accident than external audits. >> joining us right now is hank smith. he is chief investment officer at haverford investments and peter bookmar, a cnbc contributor. he's also with the lindsay group. you see t.i.n.a., what does that stand for? >> i took it from jason treanor. there is no alternative. that's the world we live in right now. no one wants cash at 0%. u.s. treasuries at 2.5%, no thank you. the german bund at 1.5%, no thank you. how about the italian ten-year at under 3%. a definite no thank you. it really brings you to equities. here we are, five years into a bull market, up 200% in magnitude. you can still find equities that yield better than bonds. it's remarkable but that's where the opportunity is. >> you think, though, we're due for a major correction because the fed is tightening seasonally. we saw major corrections at the end of qe 1 and qe 2. >> i think we'll see a repeat of that. i think we saw the rumblings of that in the high flies nasdaq stocks. >> you think the s&p and dow indexes overall will drop 15% to 20%. >> i do. >> i simplistically say the markets are driving up. we have to look at, they're taking away a trillion dollar annualized asset priced stimulus program. it's going to zero. it hasn't been proving to be an economic stimulus program. i think that will be a major impact. i think what we're seeing in the bond market is a tell also. we say a flattening of the-year-old curve. we're seeing an exact repeat of that. i'm not thinking this is going to be a different time, a different experience. >> we're still at 45 billion. usually you have terminal pricing. people would factor in to their decisions that it was going to happen eventually. but it hasn't. >> after qe 1 and qe 2 ended, the fed told us exactly how much they're buying and the date they're going to end and markets tapped out weeks after. this time around, the markets believe that they're pulling back, because everything is fine. they can somehow seemlessly remove themselves from this process without any hiccup. >> yet, ben bar tha-- ben berna says he doesn't expect those levels to get back to that level in his lifetime. >> short rates will stay below where they should for a while. pore bernanke to start to talk about his lifetime, he's had a difficult forecasting experience just two years out. i have to discount what he said. >> hank, how about you? do you think the mark set due for a correction? >> we would welcome a pull back. you're absolutely right. it is due for a correction. we haven't had a correction since the late summer of 2011. corrections are a very normal part of secular bull markets. it would be healthy and guess what? if we did have a correction from these levels, that disparity between dividend income yields and fixed income yields would be even greater, given investors once again another opportunity to get better than bond yields. >> but those people who have been waiting for a pullback, a 10% pull back. >> they are saying 20%. that's not a correction. if you agree we'll have a bear market, you need to agree we'll have a bear market. he's forecasting a bear market, right? >> i think it tells you there's very little greed. there's very little euphoria. >> you don't think we're headed into a bear market? >> no. >> okay. >> you do -- >> i think we're in the middle innings. >> let me ask you -- >> it doesn't feel like one. 20 is the official bear market. >> let me ask you both about a story on the front of "the wall street journal" today that does look like riskier behavior. it says investors have been chasing yields, plowing into corporate bonds with a ccc rating, which is something that people would consider fairly risky along the way. does that tell you there is greed, this chase for some sort sort of a yield. >> it's desperation for any type of yield. the irish ten-year was below the ten-year gilt. yes, it's traumatic. people are focused on the award of that-year-old and put aside any risk concerns which i think is mistaken. >> hank, your thoughts? >> well, yes, there are pockets of speculation. it's been very interesting how the market in the past six to eight weeks has corrected those pockets of speculation in the equity markets with be biotech, social media, high p/e stocks. you could probably make the case with cccs and other junk rated debt that you have a little bit of a speculative environment there. overall, the markets held up pretty well and is taking care of those areas of speculation without a broad based correction or bear market. >> hank, peter, gentlemen, thank you both. coming up, it is a mini super tuesday here. john harwood making a rare on-set appearance. he'll be here in just a couple minutes. later, the brand that is dr. oz. he'll be joining us to talk about business and the quest of balance, balancing the stress of making money versus having the good life. check out shares of staples, earnings falling short of estimates. just out this morning, hurt by stronger dollar and store closures. we're back in just a moment. cars are driven by people. they're why we innovate. they're who we protect. they're why we make life less complicated. it's about people. we are volvo of sweden. welcome back. it's time now for your "squawk" planner this morning. several retailers reporting this morning. we've heard from home depot and staples. still to come, we get you dick's sporting goods and discounter tj maxx. after the bell we'll hear from salesforce.com and laquinta. microsoft holding a surface event today. there's been a speculation about a new chip that could be coming, a mini or a surface 3. president obama will be meeting business leaders at the white house to discuss new investments to create jobs. that is today's "squawk" planner. however, before we go, we have a very special in studio appearance by john harwood. he is looking at the midterms. what are you looking at? >> republicans have the best chance in years to take back the senate. we'll check out the races to watch, coming up next. >> okay. thank you and as we head to a break, take a look at the futures. we're back in just a moment. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today. today is like a mini super tuesday. we need a word that's not quite super but not just a regular tuesday. harwood tuesday. i can't believe how many times we've teased that he's going to be on set. it's like the second coming or something. anyway, there are six states vote for representatives in congress and the balance of power in the senate is at stake. cnbc's john harwood, we'll talk about where you've been. i think that absence makes the heart grow fonder or something. we're all just craving, viewers writing in, where's harwood? he's on set. let's hear it, john. then come over. >> i know it's been hard but i am back. >> in a big way. >> the best way to understand the november midterm elections, think of it like football. it's a home game for republicans. and their fans are more likely to show up. first the fans. you take a look at the makeup of our political parties. the people who vote midterm elections it's very different from people who vote presidential years. blacks voted 43.5% rate in 2010. hispanics, 31%. 21.3% for ages 18-24. unmarried women, 38.3% now you look at who votes in midterm elections on the republican side. look at their core groups. whites voted 48.6%. married women, 53.6%. married men, 53.3%. it represents a big advantage for republicans because of the inherent nature of who votes. on top of that at the states where control in the senate will be determined in november, the 12 most important states that are battle grounds in the senate races, only four are states carried by president obama in 2012. eight are states that mitt romney carried. now, none of this guarantees that republicans will take up what they need for control. but it does mean that the field tilts red. guys? >> you're going to slowly make your way over here, i think. >> slowly. >> i mean, that is such a good super tuesday tie that you have. you are not currently up for office anywhere, are you? >> not yet. >> not yet. >> you haven't declared at this point. i have a question. i saw a piece about georgia, the reddest state in the world. the republican seems to be getting ahead. this business guy spent a lot of money. purdue was formerly a ceo. what are the chances that the love and respect for sam nunn translates to his daughter. >> i think it's less than 50/50. it depends on the outcome of the primary. david purdue is leading the race. but you have to have 50% to win a primary. so if he has four other opponents, one congressman, a couple tea party guys. if he gets dragged into a run-off that he lose, that increases michelle's chances. if she runs against david purdue, he has a big leg up. >> i have seen articles written that say that people that had a vested interest in there being a big fight in the republican party, that has not happened. that the big battle between the tea party and the establishment, that it has been sort of a whimper. >> it is much more muted this year. because people who care about winning elections in the republican party, their donors, political strategists, have done a much better job of squashing candidates in the general election. >> are the establishments winning? >> you can call it the establishment i guess. >> and then the other thing, there's complaints from core republicans that the establishment has abandoned core principals. right? >> yeah. but i don't really see evidence of that. >> in terms of gay marriage really. >> yeah. you get some complaints like that. in a democracy you have to figure out how to get 50 plus one. >> immigration. >> well, immigration -- >> things like that. >> immigration hasn't gone anywhere. we will see. >> jeb bush, eric cantor. >> just like from the perspective of left democrats, obama has compromised on principals. you get the same thing that happens on the right. >> why rand paul polling so well in all of these early, early, early straw polls? he's back way right on all of those issues, isn't he? >> he's got some juice. as the inheriter of the libertarian wing. he's different. he's younger. i don't think he can go the distance in the republican party as the nominee. >> you don't? >> but he certainly will make an impact on the race. >> can't go the distance because -- >> i think rand paul. first of all, his foreign policy is way out of step in the republican party. >> like his dad. >> that doesn't work. i think he's got some problems with the -- some of the supporters that rand paul has had and he has had. this go who co-authored the book with him. i think that's a big problem. and i simply think there are other candidates who potentially are going to convey more gravitas. >> i like how he says gravitas. >> right now who do you think the republican nominee would be. >> jeb bush. >> do you think he's running? >> not necessarily. if he runs, i think he will be the nominee. >> christie still has time. >> christie's chances go away. >> you want to see who wins the georgia primary. >> i got that one right. >> you want to see in kentucky mitch mcconnell has a tea party component. >> our polls favor him at this point. >> big time. >> and the question is how much of a challenge does he get. >> anything else? >> you've got a primary in the state of oregon where you have a woman surgeon, pediatric surgeon running against a more conservative candidate. those are all the things. >> thank you. >> see you in eight months. >> chris flowers took part behind the scenes in the financial crisis. we will talk to him. and we have dr. oz coming up. stick around. alright, that should just about do it. excuse me, what are you doing? uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. it means you'll be able t post from the breakroom. great! did it hurt? when you fell from heaven (awkward laugh) ...a little.. (laughs) im sorry, i have to go. at&t is building you a better network. welcome back to "squawk box" one of the key players behind the scenes of the financial crisis speaks out. an exclusive interview with christopher flowers. net jets turns the big 5-0. ceo answers the squawk ceo call. . too much stress in your life. need advice on how to handle a healthier life? the doctor is in the house. dr. oz making a call to the "squawk" set. so let the pressure go. the second hour of "squawk box" begins right now. ♪ >> welcome back to "squawk box" on cnbc. is assist a meditator? >> absolutely. >> we're going to talk about that. >> and pulling nose hairs. >> and the business on of being dr. oz. do you think of him as an entrepreneur. he has a tv show, books, magazines. >> the business of being healthy and feeling good. >> i have known for a while about pulling nose hairs. don't do that. >> i am interested in that. >> there has been a time when mine was broken and i went too long. your entire nose gets to a point where you can't even live with yourself you're a party favor. every time you breathe out it goes like that. >> i'm sorry for all of you eating breakfast at home. >> and the ears. remember the fed guy? >> can we not -- would you reach the futures. >> like a hobbit that guy. i said a fed guy. there's dozens of fed guys. >> all right. go ahead. >> futures at this hour indicated a little bit lower. and home depot. now they're up. let me see if home depot has changed. home depot is going to be down at least a dollar at this point. the 10-year, there's home depot down 1.25. it did bounce the yield. u.s. justice department filing a criminal complaint against credit swiss. they conspired to help clients evade taxes. topping $2.5 billion. it's a big one. retailers are in focus. talking about shares of home depot. earnings and sales fell slightly short of where wall street expectations were. and spring selling season got off to a slow start. shares of staples also under pressure. the quarterly profit dropped 44%. it was below expectations. results by a stronger dollar. also store closure. >> the latest chapter. the u.s. filed charges against five hackers in the military, accusing them of stealing trade secrets through cyber espionage. beijing summoned the u.s. ambassador to china and says its military never engaged in cyber spying on businesses. immediate wra and tech news, amc is using tumbler to promote its new series about the early days of computers. >> what's your other nerdy thing out in silicon valley. >> on hbo. it's funny. >> you know what i watch? >> fargo. the two brothers that did the show billy bob is also. >> did you see true detective? they have a second coming with brad pitt. >> i know those two guys aren't coming. but brad pitt. >> brad pitt could take over. >> matthew mcconnaughey would be with him. >> no. matthew mcconnaughey says he is out. i wish they would come back. >> the two of them were in new orleans yesterday. not together. they happened to be there and they were talking back and forth across this balcony. >> looking at a tattoo and all that. >> i thought they said it would be a completely different everything. >> it will be. we'll see whether brad pitt joins that. if you're wondering how technology is affecting the youth of the world, british researchers launching the largest study to date investigating whether using mobile phones might impact children's brain development. my children are on the iphone. they are three and a half. they know how to do more than i do. the study is notable. in the past, most studies focused on adults and brain cancer. this is looking different. it is looking at teens, memory and attention. so far no adverse affects have been established. you know how on a newspaper you remember what page everything is on. >> i never remember where the source was. if i hold it in my hands. >> there is something about the tactile. >> let's get to our news maker of the morning. michelle caruso-cabrera joins us. she has a very special guest. michelle. >> andrew, thanks so much. sitting with me is chris flowers of jc flowers, private equity that invests in financial institutions. thank you for being here. >> thank you for me have gone me here, michelle. >> everybody has read the book "too big to fail." you were at the front lines in 2008, 2009. lehman, bank of america, merrill, aig, et cetera. so we wanted people to know that about them and give your street cred, stokes. how is it going? but the context of that is you were pummeled in 2009. you invest in financial institutions. you always have and i expect you always will. 2009 was a brutal, brutal year. you were down 60%, 70% in two of your funds. some were carrying investment in your funds at zero on the books. how is it going now? we are five years away from that time period. what's it like now? those were tough times in 2008 and 2009 in financial services. one of our funds did take quite a beating. our market has come back a lot in a lot of years. in 2012, 2013, funds recovered quite a bit. so it's been a good couple of years for financial services. >> the folks who invested with you in 2007, 2008, fund number two as it's known, will it ever get back to even? >> no. but we have made a long way back. >> a lot more than expected. >> yes. >> where did the improvement come from. >> one was japan. japan has been great. shinsei has been even better. >> for viewers who don't know, you became famous in the private equity world back in the year 2000. "the wall street journal" described ate as the second best deal the ever, second only to the dutch manhattan for $24. you stuck with it, doubled down. it hasn't worked out as much since then. what do you expect to turn? what about shinso and all the efforts he's making there. are consumer demands finally coming back? >> what i will say about economics in japan. i have been to japan hundreds of times. the more i go the more i realize i don't know what's going on there. not only do i not know, i don't think anybody knows what's going on in japan. this is a political question. it's a question of whether these remarkable people who have shown before they can pull up their socks and get it together whether they can do it this time. i don't think it's capable of nonpolitical analysis. >> i find it incredible when you say you don't know what's going on there. what do you mean? >> it's not like the united states. i find it an opaque place. i'm not alone on that. i remember going to the senior most person of japan and say who do you work with on legislative matters. and he said nobody. nobody? that's kind of my point. >> let's get another griller out of the way. bank of america/merrill lynch. you advised ken lewis on that deal in the fall of 2008. he invoked your name repeatedly when it came to the valuation, the justification for payment. knowing what you know now, what would you have done differently back then, if anything? >> i don't think anything. i think it's been a terrific deal for starters for the b of a. fantastic deal. i think now what i thought then t. it made a lot of strategic sense. and it's proved that way. in terms of the price, i remember we discussed it that day. maybe we could have gotten it for a little less. but maybe somebody else would have bought it. maybe the deal wouldn't have gotten down and it would have gone bankrupt. >> the huge losses that were discovered later, could you have found them during that time period? >> i think they developed later to a certain extent. to a certain extent, that was the day before things went south. i don't know if they were there to be found at that moment. >> a lot of people said wait for them to go into pwrupls. buy all the assets. much more on the cheap. >> that would be the lehman strategy. i don't know whether that would have been a better deal. it's a different deal the. you have a whole functioning merrill lynch that really snapped back fast and has added a lot to the b of a. >> the last gorilla in the room, bf global. >> yeah. >> you brought in jon corzine. >> yes. >> he had been your boss at a minimum? >> yes. >> do you stay in touch with him? >> the last time i was in touch with him was the tragic death of his son, which occurred just recently. it's difficult not to feel sorry for all the trevails that man has faced. >> are you friends? >> i would say yes. >> if you know then when you know now, what would you have done differently? >> bringing in jon seemed like a constructive move. and i guess maybe his ambition. and it's not his fault of course. but the ambition he brought to that exceeded what it could handle. he was trying to drive a volkswagen at 150 miles per hour and it was just the wrong answer. >> we're going to take a quick break, chris. russia, uk, brazilingss u.s., italy, france, india. let's look forward after the break and find out where you are finding opportunities after this. stick around, guys. "squawk box" will be right back. joe, becky, andrew. and we'll join in afterwards. >> michelle, thank you very much. we will have much more of this conversation with chris flowers. coming up at 7:30 a.m., the doctor is in the house. dr. oz examines "squawk box" for stress. we have big questions for him. things like the impact of getting less than six hours of sleep a night. "squawk box" will be back with more from chris flowers after this. e financial noise financial noise financial noise financial noise take a quick look at the futures. it's been flat. 10-point range so far. we'll keep an eye on those. making history, though, cobham is buying aeroflex. 20% premium to yesterday's close. back now to michelle caruso-cabrera with chris flowers. this is part two. michelle? >> hey there. thank you very much, joe. chris, as we mentioned before going to break, bermuda, japan, france, italy, you are invested in all of those countries. which are you most excited about? >> well, the united states is doing well at the moment. offering more opportunities to invest. so it's been a planned market. uk has been a bland mark. the place we see the most opportunity to put more money to work is in the eurozone. >> you have been on a lot in the eurozone but haven't gotten a lot. why is that, do you think? >> we made several investments there. we have a deal to buy another insurance company in italy, being sold about a local italian bank. so we have hit a few. we have certainly missed a few. >> are being willing to unload the assets. what we found consistently is a lot of europeans weren't willing to take losses and market to where it needed to be sold. >> absolutely. if the objective is to reduce leverage, it doesn't work. it doesn't reduce leverage. both are examples where the european commission was -- at least the regulatory, was requiring divestiture. >> andrew has a question for you. andr andrew? >> i wanted to get your view on credit swiss and what that portends for the rest? what do you think about that? >> i'm not sure what to make about that. in the old days it seemed like if a company pleaded guilty, it would go out of business. i assume that's not the case with credit suisse. i'm not sure to be perfectly honest with you. >> is your sense, though, we will be seeing more of these. to the extent that you have stakes in others, do you think that either regulation or the way people behave is foggy to change as a result. >> well, i think conduct rest has been a huge issue. you may have seen a bank of england study of the 10 largest banks. it is more of their credit losses so just a huge issue, which is here to stay. the angle here is the criminal plea. and i'm not quite sure what to make of that. >> okay. >> just a quick one, chris, just to shift gears. we talk about inversions a lot and the different tax rates throughout the world. has that caused you to become less focused domestically? is it easier to make money in places where corporate tax are either territorial or not as high as here? >> well, i mean, we certainly care about taxes. taxes tends to be the biggest expense both at the company level and investor level. so we pay a lot of attention to taxes. i'm not surprised to see other people doing that too. >> but has that caused you to broaden your horizons in terms of domestic versus operating? are you finding more attractive opportunities because of that elsewhere? >> let me put it this way. the tax circumstances of different transactions certainly make a difference to the analysis. i shouldn't say bank of japan. i would say the bigger thing geographically is the regulatory overlay. that's a very powerful force which drives us in one direction or another more than taxes i would say. >> what's the regulatory overlay in the united states versus the rest of the world? >> well, it varies. certainly you would not say banking in the united states is underregulated. you wouldn't say that. we find it, you know, a bit less stringent than other places. although the political back drop is the same everywhere. >> you did a big transaction in the united states in 2009. that's the biggest transaction you have done in the u.s. for a very long time. it's called one west and one savings bank? >> one west bank. we have another one called one savings bank. >> you have a lot of mortgages still going through the foreclosure process from that indy mac. new jersey, new york and florida some individuals are living in their houses without paying for four to five years? >> yes. >> how does that happen? >> there is much sympathy for those who are unable to replay their loans or are in foreclosure and the u.s. system has been pretty lenient about that. >> former treasury secretary tim any geithner was on recently with andrew. he suppressed that he felt he had not done enough for homeowners. for somebody who looked at a lot of mortgage, what do you think of that sentiment? >> i can understand both sides of this. i can understand borrowers getting into difficulties, maybe having loans they shouldn't have had. i can appreciate that. and i can appreciate the other side where they borrowed the money, they're not paying it pack and something has got to be done about it. elsewhere in the world it is like night and day. we have more mortgages outside of america as inside america. we have thousands and thousands of foreclosures in america even still today. we have 100 properties in reo everywhere in the world, everywhere combined. >> you only have 100 properties in the rest of the world. >> the rest of the world combined, combined. >> and did you pie or invest in institutions in the financial crisis? >> we own banks in the netherlands and japan. between them they probably have 10 properties in foreclosure. >> hey, chris, one of the questions i want to ask you. as a former goldman sachs man, give us the lay of the land in terms of where you see investment banking. if you had a dollar in a goldman sachs, morgan stanley, citigroup or what have you, how do you see everything playing out? who is the winner and who is the loser in truth? >> well, i would invest a dollar in goldman sachs. goldman sachs is a fantastic company. i think in the long run returns on capital will get to where they should be. it's going to work out okay for the good ones in the end, which includes goldman sachs. >> final quick question. we're running out of time. your investment in russia, how concerned on you? >> it's a difficult business environment. it was already difficult the. now it is even more difficult. i'm glad it's a small investment. >> chris, thanks so much for joining us. chris flowers of jc flowers. joe, back to you. >> chris flowers to dr. oz. the business of being dr. oz. never called himself the wizard. >> i would. >> he's not from australia. okay. he is in the squawk rating room. his appointment is coming up at 7:30 eastern time. we'll return in just a moment. 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[ male announcer ] see if your business qualifies. as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. when we return, the doctor is in. dr. oz, how he can help the "squawk" gang live a healthier life. she keeps you on your toes. you wouldn't have it any other way. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about experiencing cialis for daily use and a free 30-tablet trial. welcome back to "squawk box", everybody. european union charged jpmorgan and credit agriculture cole with benchmarks with rigging. in earns news, we're continue to go keep an eye on shares of home depot. just looking now, the stock is still down. 1.25%. 75.55 the last trade. this comes after the dow component posted 20 minutes ago. earnings fell short. among the reasons the company listed, there was a slow start in parts of the country. the company did say it expects to make it all up and still hit numbers for the year. other retail, staples. earnings disappointing the street. it was hurt by a stronger dollar and story closures. 11.90. >> five years since the launch of the hugely successful dr. oz show. now america's favorite doctor is expanding into print media. it's called dr. oz "the good life." the business of being dr. oz is the man himself, dr. oz. besides hosting his tv chair, he is vice chair and professor of surgery at columbia university. and mike clinton, president of marketing, publishing the magazine. i have one question. when you think of yourself as a brand, i think of you now not so much a doctor but entrepreneur. you have tv, books, magazines. how many businesses are you in? >> i hope my mom is watching. being a husband and father, as crazy as it is is a full-time commitment, as we all know. i love being a doctor. it's a calling for me. i practice minutes from here at columbia presbyterian. my wife is editor at large of the magazine. but she's the one who maintains that part of my world. i don't do a lot else besides that. a lot of people would call me the most boring person they know. >> you have a media empire. what's that team look like? >> 200 people. and that's a side project? >> no, i adore it. i love getting the message out. i had a life plan. i was going to go to the operating room a couple of times a day. it's what i wanted to do. too many times i was wheeling them down to the operating room and knowing if i could talked to them a few minutes earlier, i could have changed it all. america is not getting the message about health pause we're not giving it to them. it's bankrupting your country. this is not a republican-democratic issue. if we don't fix the problems in america in our kitchens cars, living rooms, it's not going to work. pick the one you want. >> how does this magazine happen, for example? put this in the context of all the other media businesses you're in now. >> i love magazines. i always have. i adore the fact that you can touch the pages. in medicine, people are dying in misprint. you can rip it out and put it on your refrigerator door. the magazine tells a different story than a tv show. different pacing. you can go where you want to go in a magazine. >> i ripped the page out of a magazine yesterday. >> you go to him. he comes to you? how does this happen? >> it all started because we noticed any time dr. oz was on the cover of the magazine it was the best seller with the year. when he was on with oprah, it was her best seller. cover of good housekeeping. we tracked it. we saw the interest from the consumer. our editorial director, who dr. oz has known for many years, after some meetings at our place, the conversations began. we said let's go test a magazine together. we created this healthy lifestyle magazine. it is more than a health magazine. we put out two issues. the first sold out 300,000 in a week. second issue, sold out. 300,000 subscriptions. the metrics were through the roof. we announced the normalal launch last week. so we get going. >> is this a magazine you think will go on in perpetuity? >> yeah. >> she's obviously a personal brand. you're a personal brand. you have had other personal brands where you say i don't want to do it around this person. >> it's really about the message. oprah is live your besttranscen. that tells you that. good life should last forever and ever in perpetuity. if you do it right, there are magazines -- we have six magazines that are 100 years old at our company. there are 100 magazines over 50 years old. if you get it right and you keep the message strong, it can last forever. >> are you really involved? 12 issues a year, how many times can you say exercise? >> nights just exercise but that's important too. it's a journey. >> you'll be involved? >> trust me, as most surgeons, i'm a micro manager. it's true. the show is true. everything that i do. part of the reason we didn't launch a magazine until now, i wanted to make sure i got the tv part right. it is a long-term contract. it's doing well. we thought it was the right time to move to the next step. the magazine is a big commitment. i write a bunch of the articles myself. i read every article. you learn about what people want to see. you have to tell the story and meet people where they are in health touf adjust. whether it's the web. the magazine is not about me. i'm flattered by the picture on the cover. but it's not about me. the good life is what you want in life. it's not about fast cars and fast women. it's about things that really matter to you. >> you look fantastic. how do you do everything that you tell other people to do in terms of sleep and eating. because you have a lot on your plate. >> i'm meticulous about the people i work with. i'm very greedy about picking them and supporting them. i have a bunch long-term relationships. 29th year of marriage. my daughter daphne is on the show. i've been blessed with smart people. people in the business supporting everything i do. and i trust them. >> we have to sneak break. before we do, long term, do you think of how to transcend beyond you? it's very much dependent on your face, your brand, everything that it represents. then i think about what martha stewart has been able to do. you could argue even when -- >> it is still martha, though. >> and that's the question. >> very savvy question. we have that conversation frequently. i think it has to go beyond. oprah told me this early on in my career with her. she said when it becomes about you, it's boring about you. no one wants to talk about themselves all the time. maybe i'm the conduit. >> still be traced. >> you have to trust. that's what i really offer. that cable station is doing well. why? because it's about trust. we're the guest in people's hopes root now. as soon as we forget, then you're actually a visitor in their home. everything euimplodes. >> we're going to sneak in a quick break. >> we'll give concrete. >> really looking forward to this magazine. i have seep one of them. it's a great idea. we really appreciate you coming in. thank you, michael. when we come back, we'll talk more with dr. oz. he will tackle our what-if person. what happens if you wake a person that's snoring? what happens if you pull a nose hair? that's been a favorite around the table this morning. >> don't do it. >> from net nets is turning 50 years old. we'll talk to the chairman and ceo about the future of aviation. dick's sporting goods out with quarterly results. earnings fell short of estimates. it is cutting its full-year profit view as well. stocks down 9.6%. the company is citing a continuation of negative trends in golf and hunting for the reason for the shortfall. last trade 48.50. hi, are we still on for tomorrow? tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. carsthey're why we innovate. they're who we protect. they're why we make life less complicated. it's about people. we are volvo of sweden. 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. we have a lot of stuff here. ever wonder what happens had you get less than six hours of sleep? or what happens when you pull a nose hair? i've been doing in a long time. if it breaks, i get a new one. you have to have it. you're going down a dangerous path. the doctor is in the house. he can answer the what happens when questions. vice chair and professor of surgery at columbia university. still does 100 heart surgeries a year. angioplas angioplasty? >> we have less in vasive techniques for valve surgery. that's mostly what i do. >> i think if you exercise every day, that's 90% of it. eating is important. sleep is important. >> the single most underappreciated health problem in america is sleep. first, if you don't sleep right, you have high blood pressure. autoimmune things and correlated with cancer. if you look around the world at people who live the longest, sardinia, costa rica, they exercise more than others. now that we can study this stuff, we're learning it. >> if we're exhausted, is it better the take a nap or go to the gym? >> take a nap for sure. >> thank you. vindication! >> if you get 10 minutes of a nap. say 1:30 time period you'll get a huge benefit that will take you through the rest of the night. you won't need caffeine or need pushed up. in the morning, should i sleep an extra half hour or go work out, sleep the extra half hour. >> there is a nonscientific idea that you need to avoid all of those. we have been cross breeding seeds and livestock for years. >> my issue for gmos is more that we don't know they are gmos. transparently. we as american should know whether our food is gmo. that is stated in almost every country on the planet. why wouldn't he let american mothers know that? >> we have to do the nose hair. andrew still insists on pulling them out. >> i don't always. just occasionally. >> let me show you something you will never forget. this is the "triangle of death". everyone gets nose hairs. you pull the hair out. watch what happens. this flood leaks out. when you have any blood, bacteria gets in there. infection is next to the veins. this triangle here, you literally turn a green area alive in your brain. that leads to growing infection. karchous thrombosis, which is a terrible problem to have. everyone make the "triangle of death". if you pick in that area, you have a risk of that infection going into your bed. >> sleeping in makeup. >> you suffocate your skin. women have allergies to in kwrepbts in the products. when you're mad at the person that you love and you to to sleep, it interferes with your blood pressure and you don't sleep as well. >> what about if you wake up a person who is snoring? is that a bad idea? >> it doesn't help much. the bigger problem is sleep apnea which is a bigger problem. let me show you what snoring is. your tongue relaxes. all the muscles relax. you sound like a qaa zoo. you can literally close it off so you start to suffocate, which wakes you up. you can't have that problem if you're on your side. i would nudge them over on their side, gently, lovingly, adoringly, qaa caressingly. or putting tennis balls in your t-shirt. that way if you roll over, you're uncomfortable and you roll on your side. >> tell everybody about the green juice. >> this is fresh in a bottle. take all the greens you have left over, kale, lettuce, spinach with certificate russ, apple to make it sweet, celery, ginger and blend it. >> with the skin too? >> you're juicing it. most people don't get their seven fistfuls of fruits and vegetables. you need vegetables even more than fruits. so i juice this the night before. in the morning i get my little bottle. >> you make it every night. >> actually it lasts for a couple of days because of the vitamin c. so i could make it on sunday night and it's easily good until the end of the week. but normally i will finish it. >> it's not to cleanse? >> it's not for cleansing. but to be clear, cleansing has been miss sperped. you're starving yourself. most people who cleanse is starving yourself. >> jim cramer is watching. >> i know him well. >> you guys are friends. he wants to let you know why you let your boy play football. >> oliver plays here in engel wood. i love him dearly. i do not want to take from him something i had when i was growing up. i played football in high school. it changed my life. i played in college. it changed me even more. i wouldn't be the person i am now. i had a concussion. maybe that's who i am right now. >> did you baseline your son's brain? >> i did a baseline neurological exam. i am very meticulous about examining after every game. i go around talking to moms. they are nervous. they should be. this is not just about football. hockey. one of my daughter who was captain of her basketball team had a concussion. and water polo. you can get kicked in the head. what do we do to find them early enough. >> what is a day in the life of dr. oz? >> i was in detroit. we had a problem getting back. but normally i'm religious about the seven and a half hours of sleep. if you call me after 10:15, i'm not going to answer the phone. i get up at 6:00, do a quick seven-minute cal steupbic workout. i automate everything in the morning. don't make any decisions in the morning. you should eat the same breakfast, have the same snack, same routine. make the decisions in the afternoon. they looked at parole judges in israel. they gave many more paroles in the morning than in the afternoon. they were so tired of making decisions they made a nondecision, which is to grant parole. save it for the afternoon. >> i thought i was getting on old or ocd. nothing changes for me. i have one hard boiled egg in the morning. that's all i do. >> if you look at habits of successful people -- >> put the water in the bowl. >> i turn the water on to get it cold as i do other stuff. >> that's ocd. that's different. >> i make no decisions in the morning. >> if you look at the habits of smart people, that's what they do. you don't want to waste time making decisions. you need it for more important things. one of the biggest mistakes we make is going out for breakfast in the morning. make it at home. it's easier to make for the kids. it's hard to find healthy food when you go out. save those decisions for later in the day. >> you go to fancy lunches occasionally with fancy people. >> i do. >> what do you eat? >> my wife is vegetarian. i generally eat vegetarian foods, especially at holy. if i go out with friends, i eat what the restaurant makes. i don't want to hinder. i want to celebrate life. i try to do the right things in terms of my health, i feel great at that moment. living longer is a side benefit of all of this. if you appreciate the sacredness of life and your daughter. i just had a little granddaughter. daphne had a little baby. when you see life brought into existence, you realize how special it is. we think we are these placenta mow filled ebg toe derms and we ignore the magic inside of us. i would never tell someone addicted you shouldn't do that. >> you used to live in new jersey too. >> it's the best. >> keep talking. >> when you go to lunch, you're in the city, though? >> yes. i go to the city every day. what i love about new jersey, it's a little slice of paradise. when they're naughty, i tell them to go outside and play. it's hard to do that in manhattan. >> thank you for being here. this is a lot of fun. i learned a lot. >> there will be a quiz later. >> i just love that you told me i could sleep instead of go to the gym. i have permission now. dr. oz, thank you. when we come back, net jets 50 years young. the future of aviation with the chairman and ceo. as you head to break, take a look at futures. right along the flat line. that's the case. dow futures down two points. we're moving our company to new york state. the numbers are impressive. over 400,000 new private sector jobs... making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies. what is this place? where are we? this is where we bring together reliably fast internet and the best in entertainment. we call it the x1 entertainment operating system. it looks like the future! we must have encountered a temporal vortex. further analytics are necessary. beam us up. ♪ that's my phone. hey. [ female announcer ] the x1 entertainment operating system. only from xfinity. tv and internet together like never before. coming up, markets kicking off the week in the green. investors remain weary of the economy. we'll get out look and talk portfolio strategy of the ceo of merrill lynch management. is a new form of disruption taking place in media? digital convergence. how you view content and how we live our lives. "squawk box" will be right back. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. are the largest targets in the world, for every hacker, crook and nuisance in the world. but systems policed by hp's cyber security team are constantly monitored for threats. outside and in. that's why hp reports and helps neutralize more intrusions than anyone... in the world. if hp security solutions can help keep the world's largest organizations safe, they can keep yours safe, too. make it matter. pharblgts starting the week off on the right foot. but jitters remain about the state of the economy. we talk portfolio strategy with the cio of merrill lynch phgt. and strategist at ubs. could deals like yesterday's at&d/directv change the way we view media? the consumer perspective is ahead >> plus, the man who created facebook's android app. why he is hunting for start-ups in the valley as the final hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin has not been pulling any nose hairs. i've been watching. you got it, right? i've told you. you don't listen to me. >> the try angle of death. >> "triangle of death". pus going into your brain. >> while everybody is having breakfast, we have other top stories to tell you about besides pulling nose hairs. home depot's first quarter earnings fell a little bit short. they expect sale toss grow in line with previous guidance. and staples is forecasting a decline in sales in the current corner. that company trying to win back shoppers who have been buying office supplies online. they are also announcing to close stores. dick's sporting good is also falling short. negative trends in hunting. allergan is fighting back against bill act man. he used the company ceo of having a conflict of interest. he said the reason he was going to the lead director is because the ceo could potentially lose his job. well, that happens in just about every merger. they have released its own letter. it says the ceo has created enormous value for the al gan stockholders. it goes on to say the entire board, including david pyott, is open to all options that will significantly enhance the value of allergan for all stockholders. the nasdaq was a standout with a gain of nearly 1%. so does the recently lack of market direction signal a change in sentiment is coming. chief investment officer of portfolio solutions at merrill lynch wealth management. this has been a confusing here juror not markets. last year you saw gains of 30%. this year the market doesn't know exactly which direction to head. which way do you think eventually heads out? >> we have been telling people that they really have to be patient. if you look at it, you did have the enormous run up. you have had issues. you have had concerns about growth in the u.s. that weak first quarter. concerns about growth in china. newly aggressive russia. the market has really gone nowhere in the broader indexings while you had this pull back in the biotech, small cap to us is a sin of underlying strength. you need to stay patient. >> we had two guests earlier who said we could see a pullback of 15% to 20% in the stock market major averages. do you think that's possible? >> absolutely not. fund managers maintained high levels of cash for the last 11 months. it was 16.50. the market is still climbing the wall of worry. we don't have a lot of leverage in this market, becky. when we look at a third of the companies in the s&p, they're yielding higher than the 10-year treasury yield. so i think the market, because of the harsh correction that we had in the nasdaq, the internet and biotech and small cap, the leadership, everyone is expecting the the market to take another plunge. where this is just a healthy rotation of the leadership. by year end, we will be sitting at new highs in the market. >> julian, you're nodding your head. you don't think that is in the cards either? >> no, i don't. you had this pullback in internet, small caps. we sort of take the test of new york city. cab drivers are no longer talking about small cap stocks. they're talking about california chrome and they're talking about how low bond yields can go. when they talk about how low bond yields can go, we think that's a sign it's about to play itself out. >> california chrome can wear the nose strip. >> i'm going to start wearing breathe rights on the show. >> that might help you breathe more when you're reading names. the three guys that make the decision in new york said -- >> you want to see a triple crown winner. >> but why not. it's not like a drug or something that's spreading out your nos. treuls. you should let the horse do that. >> anyway, back to the markets. going off on chrome a little bit on that. let's just say if you were advising clients right now, would you be telling them to buy indexes or will certain groups perform much better than others? >> we're in the camp that you want to be very selective. technolo technology, energy, autos and manufacturing. if you look at the industries for example, they are high quality companies by s&p ratings. if you look at manufacturing, we think it is already starting to come back to the united states. you have seen a company like siemens announce they were going to build a plant in south carolina in november. we're talking about transformation of our economy by fracking. the markets don't want to get excited that we're hitting new highs in the s&p and the dow and the transport. all we heard last year is we are looking for that 10% correction so we can buy. people are still waiting. if you look at the aaii, the survey for individual investors, it is still on a buy signal. >> julian, very quickly. one sector you like better than others? >> health care. health care has been the source of all this m and a activity. very large cash balances. it will enhance revenue. we think health care works. net jets is celebrating its 50th anniversary since launch anything 1964. it flew 300,000 flights last year. joining us on set is the chairman and ceo. it is hard to imagine it has been around 50 years at this point. >> isn't it crazy? >> yeah. >> it's been quite a run. we're very proud of what we have been able to do. >> we talked with you recently about this. whos your average customer? who is really flying? for a few thousand dollars i can get on a flight and go to omaha. >> we're the largest flight department in the world. large corporations will outsource to us. individuals who are of means. >> individuals of means. let's say i want to take a family of four or five people and go to california, what would that cost me on net jets? >> at least $30,000 to go there and back. >> so corporations are much bigger? >> it's people who have the ability to do this or have the need to move more efficiently. >> you're going to get into china. >> we hope to be up and running by july. >> how many people are of means in china? >> more than you think. >> if you say 2 billion and you do the math, that's a lot. >> there's a lot of cities i'm sure they would like to fly to. it is tough to get there. >> we think that's exactly you right. they have a little ways to go. they have to build airports. they have to be friendly to the aviation department. it's got great promise. >> we will fly all over. take people wherever they want to go. if you own an aircraft, you can bring it to us and we will take care of it for you which means you direct where it goes. >> do you have to have a chinese partner? >> we do. we have to have minority stakes. we're looking for joint ventures when you do that. >> what do you think your growth looks like? this is a growth business. he said i don't know if it's a growth business anymore, but i do think there are opportunities in asia and elsewhere. >> we are large in the united states, as you know. the largest operator in europe as well. he made the point we have reached a fairly large level already. where he sees this growing is internationally. but that's a longer term play. >> does he hang on because it's a vanity player? is it making money? >> you would have to ask him. >> it is kind of a vanity play. >> it's been profitable. we have been profitable several years now. he has a decent return on investment. i think he's been able to be an owner and fly with us and a financial standpoint. >> what is your goal year over year or even five years out? >> we have been moving up 9 over 10. at some point it will start falling back down again. we fell off in 2008. >> you know kenny. he has wheels now. well-known by everyone at net jets. are you competitors? is he going after a part of the market now that may be even taking it down a little bit further with props and going closer and a little bit cheap senator a competitoror someone that can co-exist? >> it's a little bit of both. main focus is down market. he will talk about wanting to fly jets too. ease not unique in that record. there have been competitors that have come and gone. it's what makes our 50th so remarkable. >> thank you for coming in today. >> i do want to tell but breaking news from target. target, which you know very recently, removed its ceo, is now removing the head of its target canada operations. greg steinhoffel, and what happened with target. it's a huge issue analysts have been focused on. today they are announcing a number of leadership changes, including the ceo of target canada stepping down. he's going to be replaced by a 15-year target insider whose name is mark shin dell. again, tony fisher is going to be taken out of a job as president of the canadian operations. more on the story in a moment you can see that stock not really responding to this news just yet. >> $49 billion bid for directv. how it could change the media landscape. we will find out what the deal means for consumers. as we head to the break, check out the "squawk box" market indicator. financial noise financial noise financial noise financial noise cozy or cool? 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[ female announcer ] the x1 entertainment operating system. only from xfinity. tv and internet together like never before. welcome back to "squawk box". directv and at&t merger got us talking. is the rapid rise of tv watching on mobile devices really driving all of this? joining us to discuss is the editor at large. good morning to you, brian. >> good morning. >> help us make sense of all of this. if you read the op ed pages as a consumer of the wall street journal this morning, they say the fcc has no good reason to block the directv/at&t merger. they raise all sorts of questions about whether this deal is good for consumers. which is it? >> well, that's to repain to be seen. that's not a waffling answer. this particular merger one i have not seen so much wall to wall abject opposition. some say it is not good. others say it is good. these two companies are coming together without a lot of overlap. what the commission will look at is, first of all, is there an efficiency that's going to make them broader, not just bigger as a bully in the market. and are they going to offset the other big deal they are all watching that is moving in the cable biz. because of that, this may get seen in a different light than if it srapd in a vacuum. >> you are suggesting this may be a good thing for consumers. one thing randall stevenson told us is consumers like everything bundled. they like one bill, one customer care unit. if they can get mobile, wireless, home, brad band from one provider, that is a better outcome. >> this merger repaints these two companies into tomorrow's bundle of services and tomorrow's world. to be just a broadband or broadband and wireless and not have a major television product which is pay tv and relationships with big content providers is lopsided. directv also lopsided. who wants to go without waoeurls or broadband? dial tone and land lines is the only thing we don't care about. they are coming together to be a much more modern reflection. it will take you from a large pay tv company down through wireless to broadband. it is part of the future. >> project out what happens to a comcast. it has gotten bigger but it doesn't have the wireless piece. they are building wi-fi in many major cities. we saw on the northeast and i think elsewhere. what happens toen ecostar. i'm going to show my age. what happens to dish? >> the cellular wireless we think of is the ma skwrt of the companies right now. as you know, there's a lot of off haul to go from the expensive hard to place towers into wi-fi cells that are optimized to carry mobile device traffic. the consumer won't see that transition. for the providers it's a way to the get into a certain kind of traffic and device business without necessarily having to build erect towers or companies. it allows them to get in the same business through physical channels. >> could a provider like comcast become a wireless provider? not just broadband but a voice as well? >> right now as we see them it is early to say you can skip being in the tower business and be a credible wireless provider. that is the gate keeper for any number of years ahead. looking down the road more, we see more transition to other wireless from mobile. >> you're out in the valley. what do content providers, the people who are creating the content that gets streamed over all these services, how should they think about all of this. clearly in the case of comcast time warner transaction. companies like netflix have come out and said they're nervous about it. >> this is going to vary by the content provider. they are both a rights acquirer and streamer. increasingly a content creator. others are more rooted in being just acquiring and streaming. that's kind of changing. you're in the commodity business. creating premium content continues to rise up. after the technology matures, after a public appetite is established, you have to get your hands on unique content and then find places to distribute it that are low friction. i can that's what this deal might have in it. we are vertically stacked from wireless, to pay tv. what they don't have, though, is quite a strong -- not quite as strong as a cable infrastructure. fixed line premise pass as comcast. let's not leave out the fact this is going to be a big boost for the hrat american business of this combined company. >> brian, last question. 10 years from now, satellite. as a technology unto itself, it may not be the future. is that right or wrong? >> it's not the sexiest platform. the high degree of targeting we get from ip based that are directional on the ground or wireless is where the mode is right now. however, this could perhaps lead to technical innovations are at&t could off-load high band width, 2k and 4k online streaming to a satellite channel as a bundle and take load off its fixed premise broadband. >> i'm not sure i totally understand. joe is going to explain the to me in the break. >> let me just draw a little diagram. >> thanks for joining us. >> joe, you're going to write the code? moving on rails. do you know about that? >> i'm worried about scale later and granularity. >> we have two amazing stories after the break. i didn't mean to eat. but if you like them. if you don't like manatees, two amazing stories. we have adopted a manatee. >> you have? >> yeah. i think it's mandy or something. later, investing in start-ups. a former face book employee helping dfj find the next big disruptor in silicon valley. he will join us in just a bit. you, my friend are a master of diversification. who would have thought three cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks. clearly you are type e. you made it phil. welcome home. now what's our strategy with the fondue? diversifying your portfolio? e*trade gives you the tools and resources to get it right. are you type e*? carsthey're why we innovate. they're who we protect. they're why we make life less complicated. it's about people. we are volvo of sweden. welcome back to "squawk box". time now for the manatee block. you'll see why we are calling it that in just a couple of seconds. high schools around the country getting ready for graduations. a new policy at a florida high school is causing outrage. manatee high school in bradenton, florida, is being required to pay $20 to participate in the event. i guess graduates are. and if parents want a premium view of their child receiving their i did blow that, the school wants $200. >> what? >> it is to pay for the ceremony due to lack of funds. >> that isry duck louse. that is ridiculous. >> you have to pay to get a view of your child at a public school. >> i know. there's no income tax in florida. there's a reason people are -- >> talk about complaints over in equality. >> one-time $20 fee. >> 200 bucks if you want to see it? >> check out your new jersey taxes and see if you pay. from manatee high school. >> we have a bake sale. >> we go to manatee. it is manatee mating season. beachgoers in florida getting a bit of a treat. a group of manatees got up close and personal, swimming near the shore. according to the florida fish and wildlife conservation commission, the aquatic mammals are doing exactly what you think they're doing and what comes naturally. it's mating season for the mammals. even though they are this close to the beach, normal behavior. in these pictures the males are trying to catch the female and get her in a specific area. that way it's easier for them to start mating. visitors should be on the lookout for similar near-shore manatee sightings for the next couple of weeks. it's a big, big animal. so you're going to know. and nothing like a little animal orchestra to get you in the mood if you're a manatee. >> there's nothing like this gentleman right here. look at you. >> i'm blushing. >> i'm not going to add any more fuel to this. >> you are blushing. >> manatees mating. you're blushing. >> oh. >> birds do it. bees do it. every person in the world is a product of a sex act. >> sure. oh, boy. when we come back, he invented one of the earliest versions of social networking with microsoft. and then facebook's android act. bubba murarka. when we come back, we'll talk a little bit more about target. what happened there with the removal of the head of the canadian operations. who is stepping in and why. look at the u.s. equity futures. those little things still get you. cialis tadalafil for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. welcome back to "squawk box". the president of target's troubled a kwraeud than operations tony fisher is out. this comes two weeks after they announced the abrupt departure of greg steinhoffe due in part to the data breach but what's been happening in the canadian operations. mark shin dell is a 15-year veteran of target. he's been in retail 22 years. he has expertise in a lot of different areas. he has taken a key role in launching new formats in the united states. he is supposedly very good at inventory management and supply chain and forecasting issuesment that's been one of the big problems in target canada. if you have too little inventory, you don't get some of the sales you would have made. he's opinion an expert in some of those arenas. he is an american. but at the same time target will add a tphpb executive chairman, canadian to guide. this has been something analysts have been focused on closely. the interim ceo john mulligan will join courtly reagan on street signs. >> what's that report going to be like tomorrow? >> a kitchen sink one. >> you have to find out from cramer. >> we will be speaking from cramer a little bit later. >> we want to give you other consumer news. after 40 years, burger king is scrapping its have it your way slogan. that slogan will be replaced by be your way. the new motto is more personal and should remind people to be more personal. be the bullet. be your way. be the ball. >> i note to burger king management, but i don't like it. it doesn't make any sense many be your way. different, i understood. this really doesn't make any sense. apologies to the buscher buscher king. i like the burgers better. i love mcdonald's fries. >> it may not be the hot engine of growth many were hoping for. there are plenty or factors driving the economy forward in the second half. steve liesman joins us. >> right in a way you were in position to advise those kids to get a real job. i would take one course. >> one is good. two or three is good. do a macro and micro. >> it's a pseudo science. >> after you spoke to some of them, a couple gave up economics for good. >> more rigorous things. look at the data. >> it's a way of thinking about the world and understanding costs. you can't. that girl christina gave you that answer. look, it's a social science which you made the wisecrack, no, it's socialism. you don't think i'm listening but i am listening, joe. i'm registering that stuff. there is no defifth active numbers you can put on it. it's a way of thinking about the world. i want to tell you they went into the last thing, texas versus indiana. bel air versus carmel. >> i got to live out my alex trebek fantasy out there. you know how you do this. you act like you know the answer and you look down your nose at the guy getting the question wrong. the last question, which of the components of gdp is most important for future growth? >> we said what are the components of gdp? >> they all knew what they were. the answer is investment. that segues right to the topic, where are we hurting now? we're hurting in investment. if you look at some of the components of gdp, which i brought together in chart form for you here, you can see where it's lacking. business equipment. there we go. they have been lack loster. take a look at the combination -- i don't know which is next. that next one is there is housing starts. look at that. look at where we were in terms of housing. we have been clawing our way back. >> we find of knew this. this is supposedly the year when businesses are pogue to start to spend on capital expenditures again. >> we haven't seen it necessarily. i think perhaps. maybe andrew knows this better than i do. mergers and acquisitions are a prerequisite for it. you buy what's there. the toban's cube is when it costs more to buy a new one, that's with when you buy a new one. right now guys are buying existing companies, existing capacity. you know who is the worst is trebek. he's the worst. the three people all get it wrong. >> what does he really know? that was me yesterday. >> let's bring in gus. >> i want to hear andrew's answer. >> tell us about -- 4% in the second quarter, gus. and then the rest of the year, 2.8 for the second half. that won't get us to three, will it? >> no, it won't. we'll still have a final good three-quarters. first quarter was an anomaly. we had better weather. hits and trade from inventories. conditions are in place for much stronger growth starting in the second quarter. bounce back from bounce back. stronger business investment. recovery in housing. things will look a lot better through the rest of this year. >> housing isn't all it's cracked up to me. it isn't, is it? >> no. it's not where we want it to be. we had a nice bounce back with starts in april. weather was an issue. so there was some concern can there. we are having a bounce back there. there is still a huge amount of pinned up demand. people have been putting off home purchases. we expect to see those come back through the rest of this year. i think with rates low, things will look a lot more solid through the rest of 2014. >> we had cap ex falling at 5% an rate in the first quarter. certainly some of that was weather related. but what turns it around? becky just asked this question. i think it's an excellent one one. why did the guys and the few women in the executive suite make the choice to start spending this year? >> i think what they are going to find is they are going to need to do that to get ahead of their competitors. they have been holding off because they have been scarred because of what they have been through. i think the animal spirits are still there. we had a small business survey. i think they are simply going to say this is the chance to take the step forward. we have been in recovering five years now. things are picking up. we need to invest if we want to stay ahead of the game. >> i hear a different thing over and over again, which is our business is slowing. our growth is going to be flat. we have to buy revenue. that's the only way we can do it. the question is whether you think they are doing that instead of growing their own business. because they are anxious. >> this is where kernen is right in the sense that it is not a science. two ideas. one is that the cap ex follows the demand. >> right. >> and says law which is supplies create its own demand. gus, tell us what happens here? do you have to have demand first or the investment and then the demand goes? >> you have to have the demand first. we are having that. we will have it on the housing side, on the consumer side. >> guys, if you look at the mergers taking place, most of those, including at&t. i would argue that's a strategic deal, they are buying revenue. >> does the price for buying revenue goes up, at some point it pays underneath it to build your own. >> when does that happen? >> you have to have the deals to drive up price to create the demand underneath. >> i'm still stunned that at&t can walk away from that deal. pause the nfl. if they don't get the sunday package they can walk away. >> you wore a light brown suit, yellow shirt and brown tie. do you have see his sports coats? it looks like he bought one and got two free at joseph banks. >> as joe and steve talk about fashion, when we come back, up next, a big microsoft event to tell you about. he created the android app. he was the head of products at the social media giant for years. now he is foggy to be helping dfj find new investments in the valley and beyond. he will join us next to discuss. first, as we head to break, tjj trading lower. reporting first quarter sales below analyst estimates. current earnings, guys, is short of consensus. we're back in just a moment. ♪ ♪ no matter what kind of business you own, at&t business experts can help keep it running... seamlessly. so you can get back to what you love. when everyone and everything works together, business just sings. welcome back to "squawk box". microsoft set to announce the newest version of its surface tablet. we could see a new chip for it or perhaps a mini version of the device. it comes as growth in tablet sales has slowed. make sure you tune in to squawk alley. i don't know if i have gotten to say squawk alley. we'll be covering it live. so check it out. >> the at&t deal with directv bringing mobile technology into focus. joining us is partner with df skr. he was brought into face book to create their mobile platform. great to have you here. >> great to be here. >> let's talk first of all, about what you learned about mobile when you were there, when you were at facebook. what does it take to really be successful? >> one of the amazing things at the time i was at facebook, i got 100 million users and saw it go to a billion. the thing i took away was incredible around the scale of mobile. i don't know if you saw the u.n. report. 3 billion people expected to be connected to the internet at the end of this year. 7 billion users are together to be connected via mobile subscriptions. that means in five years or so, more people will be connected via mobile phones than ever on the internet today in that's amazing. >> it had to be bigger than anything you ever anticipated i guess. >> the transition to mobile is the primary for facebook was dramatic and swift. and i think you're just now starting to see a lot of other industries cannonize that. even facebook's latest performance is seeing how dramatic. 60% revenue coming from the mobile. >> is that what you think is behind the at&t directv drive? >> i think the at&t directv was an interesting idea as these classic infrastructure providers are looking for ways to create more value as they avoid becoming commodotized. in this case of at&t and directv, yeah, there's this powerful tie up by offering television and mobile service you can offer potentially really interesting mobile video. that's one of the hugest drivers of mobile consumption right now. imagine a day where you can watch your nfl game on your at&t phone without worrying about how much data you're using. >> it all eyes back to having really good content. it has to be a "game change"ing situation just for content providers. somebody library the nfl. how much more powerful. do you ever look at the content side? are you simply looking at how you get those platforms to people? >> it's interesting. there's definitely an ability to build large businesses based on content. in mobile, the biggest content sector is gaming. you see companies like super cell. there are a lot of opportunities around that. and the challenge with content oftentimes is maintaining the scale once you get to a large number. the concern of hits being driven. and given my training as engineer and someone who built products and ship products for 15 years before i jumped on this side to invest at dfj, i really do tend to focus on the platform opportunities, just because there are what i know and i have seen them scaled so beautifully. >> what do you make of this whole area of controversy and what is going on in the supreme court. we're talking about devices and how the internet is changing all of that. >> yeah. that's a great question. i have been following along like many -- actually hoping to become a subscriber of the service. i cut the cord a couple years back. >> you cut completely? >> i cut the cord completely. i became a father. and we realized we were like oh, my god we need as much simplicity in life as possible. we got back to good old cole cast i think the arrow experience of being able to enjoy television without being able to worry about having a cable connection is beautiful. it is indicative of the future direction and it's a question of what the right business model is. it is pushing on the concepts of classical content licensing. and i don't know where it's going to evolve, but i think it will be a landmark case. >> one other question. i know i'm jumping around subjects. we will be here at 11:00 a.m. >> what a great name. >> about this new device that microsoft is making. as a former microsofter, how do you think about the company? how do you think of the new ceo, the direction of what they're doing? >> yeah. so, you know, i had a chance to be at microsoft very early in my career and was formative and worked for nadel. i'm a big fan of his. i'm exciting to see the moves they're making to open up and embrace the killer franchises they have. for a long time, microsoft is focused on the windows platform and viewed through what is going to help or hurt the windows platform. you are starting to see them go beyond that. microsoft office for the ipad. the success of the xbox. i'm really bullish on the potential for the company. but i think it is early days. it will be interesting to see it transition and become more -- less microsoft platform centric and more user centric regardless of what platform they're on. >> bubba, thanks for joining us today. really appreciate it. >> it's great to be here. >> talking about cutting his cord. la, la, la, la. >> i'm not listening to him. >> when we come back, we'll check up with jim cramer at the new york stock exchange. some of the news of the day. what he thinks of target and dr. oz too. 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[ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. let's get down to the new york stock exchange. jim cramer joins us now. i just wondered, target makes move, reporting tomorrow. when you make moves before a report, you -- who would buy the stock today in lieu of what they'll say tomorrow. is it going to be bad report tomorrow? >> 124 stores in ten months, kanka different from the united states. this has been a fis asco. billions of dollars. some think they're going to get out of canada. i don't think they're going to do that. it does have a yield. the dividend seems sach fe to m. always seems to be someone who wants to buy every retailer who gets hit thinking this is the last bad quarter. this is probably not the last for target. i think you have to give it room. >> if they could this today, reporting tomorrow and we know the ceo is booked tomorrow to talk about the numbers. i mean, and a lot of times they'll -- whatever the last ceo did they put it in this quarter to get it out of the way too. i'm wondering how bad it could be or not going to be bad? >> i think look, if you get this at 3.5% yield, still a growth company, not a bad company, it has a lot of adhere rence. but i look at so many other retailers doing well. none of them today, though. i mean everybody that's reported today is sub par. >> yeah. yeah. all right. >> going to keep it short. we will see you in six minutes or so. >> thank you. >> when we come back retailers ready to report. we've heard from dick's, tjx and staples. jim talking how many have underperformed. we'll run through the names you have to watch after this and as we head to a break the s&p retail index. 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[ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge. 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." busy week for retail reports. home depot, tjx and staples. a lot more throughout the week, lowe's, target, tiffany's, sears and best buy. the director of specialty retail and apparel at sun trust, joins us now with a preview. what do you make of all this? >> it was definitely a difficult 1 q out there. the weather issue going on. i cover the specialty apparel retailers and there are a lot of problems as well with the fashion in the marketplace and just not resonating. then layer on to that traffic issues. no one was going to the mall. the customers wasn't inspired. and we're seeing the results out there now. it's just not a good quarter. >> home depot today. lowe's later. what do you take away from that, for example? >> you know what, i don't cover home depot and lowe's. i do the apparel retailers. >> when you think about apparel is it possible that over -- that given the weather and all those issues that somehow it gets pushed into the summer or is it all done in. >> you know, that's an age-old debate whether there's pent up demand or not. i think that in general there's usually not pent up demand. the product has to continue flowing in, excess inventories in the marketplace, they need to get marked down and it's a situation where the customer is buying the marked down product at the expense of the retailers. >> who do you love and absolutely hate? >> i love abercrombie. i think that's a controversial stock right now. a lot going on there, but i think there's a lot of improvements they're doing that go beyond the external environment out there. the teen space is incredibly challenged but they are the winner among the teen spaj. burlington among the off pricers, a recent ipo did a secondary, that's another one we think has a lot of opportunity to double their store base, longer term, get in on the ground level here. as far as names that we're a little more cautious on, we were cautious on urban heading into the earnings. urban outfitters. other teen retailer including eagle and air row postell. >> what is their problem? >> the teen space overall. >> american eagle? >> american eagle obviously searching for a new ceo currently, which it's never a great situation to be without leadership and then they also have a high portion of denim and it's been a challenging denim cycle as well. >> okay. ann, thank you for joining us this morning. >> look at the prompter. you nailed it. that's what we need to do. quinn till-ee-on-no. >> you nailed it. >> i was told in my ear they repeated it several times. >> and spelled it like that. >> that was like sticking when they get off -- >> like boom. >> sticking it. >> we're sticking this right now too. does it for us today. join us tomorrow. time for "squawk on the street." ♪ ♪ friends with the munster ♪ the voices inside my head >> welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. busy morning shaips shaping up. home depot. microsoft expected to update its surface tablet this morning, futures aren't far off the flat line. ten-year yield claued back to almost 2.55. the econ calendar light today. most of europe is mildly in the red. our road map begins with home depot,

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