actually i've got a -- thanks for erasing that. >> i saw 51 earlier. and then -- >> 51 earlier in the week and then 52. >> you saw newscorp yesterday, right? >> newscorp, which was out of control. >> film, television. >> fox news. >> avatar. >> avatar, 5 is% operating jump in fox news. 13 out of the top 20. >> not to mention fox broadcast. >> fox broadcast, too. >> yeah. well, television and movies were the big hitters. but we've got comcast to go. we've got a lot of media stuff to go. >> comcast, the mothership. it's not quite the mother ship yet. >> still near the mother chips. one is a 51% mother ship. >> it's kind of like where the

characters has two movemies. >> yeah. or two dads. in corporate news, aig says current and former employees have agreed to a step retention payment that cuts the total by about $20 million. that's a bit short of a $26 million target. aig had agreed to pay out the bonuses earlier if employees accepted some reduced amounts. dp is set to pay out as much as $100 million in bonuses this week which is a rounding err just about anywhere. >> not to mention, a lot of those were probably built into contracts. this is not just a promise. >> but it was a $100 billion plus company, so worry talking about $100 million here. >> but you think it's going to -- >> what i thought was interesting is the goreman takes on the heavy knews that -- was

too high. >> whoa. goldman shamed into 36%, basically. >> yeah. i don't know whether you call it shamed into it. but for whatever reason, that's versus 62%. and morgan didn't particularly knock the cover auflt balance last year. >> no, exactly. >> but after all is said and done, carl, this is employee compensation. every single company, there is a part of that company is employee situation. all the of the wall street companies, they're not making cars or making metal, but -- others would argue that the carmakers didn't -- >> i know, but people have to -- you do get paid -- >> how much? >> i don't know. that's the question. that is the question and it's all mixed up with the government money and the low-cost money

they're getting from the fed. so there's a lot of -- >> you've been cite california of the gaurchbts. >> airlines, you have just fuel, but you still have laush. >> "squawk box," for you -- do you know what this is costing? >> but in terms of your compensation, that dwarfs the rest. >> yeah. >> but a lot of people don't deserve bonuses. i would have to put it in there that you do deserve a bonus. >> thank you. reporting more than $4 billion in 2009 for bankers and traders for bank of america. the payout is about 19% of the revenue that the company made. on average, each employee will collect $300,000 to $500,000.

the figure is said to by close to its payout in 2006, which was the peak year for payouts. maybe that's the problem people have, the healing is nowhere where it needs to be. but the bonuses are back near those historic highs. >> but then he could hear we wanted the people to start doing well. in the back of our minds, this is what we wanted. >> yeah. >> we wanted -- you know, we wanted to heal the banking system. it's all tied up with the low cost of money. at this point, a lot of these guys have paid back the t.a.r.p. with interest. we should have been happy with that, but we're still not. we're still mad. right? aren't we still mad even though we got back with t.a.r.p. with

interest and now there's low cost money. >> and on top of that, the complaint that they're not lending weigh they should be. >> yeah. and an internal unemployment rate in this country of what? 17%. what do people say it really is. yeah. 6%? 16%. >> and then you come up with this bonus. >> we're clearly not in control. >> no. a lot of the viewers think i have a button here for the animal orchestra. i don't have a button and -- is he still on? i don't think so. anyway, a new plan to revise small business lending would reduce the capital for small banks as they make more loans. a program would carve utah $30 billion for new next pay funds.

i'm spriets i didn't talk about that yesterday, explaining how it works. the plan requires approval by congress. >> dodd has found some new bipartisan -- >> well, he's only got 59 guys now. he is from connecticut. there's a couple of -- >> yeah. >> there's some financial firms up there. >> that is true. but people are saying that he is going to take the volcker rule and sacrifice it in the name of bipartisanship because he is coming to the end of his career. >> coming to the end of his career. >> and has no problem criticizing the white house. >>@this point b he doesn't need

their support more, right? >> naert. the policy of investening. >> fan nie may and freddie mac is defending the way the government has overseen those two mortgage agencies. regulators suggest private firms are likely to replace the fed as buyers of new mortgage-backed securities by the fegs. let's check on markets now. do you know the last time we had who up days? >> july? >> october. >> that was when we thought we had done everything and then we got a couple of big ones. we were talking earlier today

about a lot of the things that caused all the articles to be written lately, the latest to do with a correction had to do with china, had to do with the new regulation on the banking system, had to do with greece, but it was in the face of all these pretty good earnings reports and a pretty good marketing number. and was worried about. china still looks pretty positive there, right? greece? i don't know. >> let's find out today. the eu is going to issue an opinion about what they need to do. >> now we're back to the employment report. we had challenger, adp, then we get the claims. >> yes. >> and then we get the friday jobs. i'm getting used to this. >> you've been doing it for a while and you're just now k567ing on. one thing you'll never be able to do is time warner. were you worried about the industrial ebeta.

you were wondering what that number was, up 35%, which is pretty amazing. how many different -- there's ebidah? >> i think the beatles were looking at balance sheets. oil is having a pretty good trade. some of the risk trades are coming back after we saw it drop off over the past two sessions. although gas prices are pretty close to the yield still. the dollar, though, getting some son kol addition as people get back into the euro. and then gold, today, more muted at $1,119. carolin schober was the latest out of zurich.

>> good morning, carl. it's a fairly positive picture for the european markets. modest gains, the ftse up 30.1%. the dax is in positive territory. now the smi is slipping into negative territory. in terms of the sector, auto stacks aren't performing quite well after those u.s. january sales numbers yesterday. construction stocks are on the rise. but we see a bit of weakness in some of these health care titles here. roche is one of these health care stocks trading lower, down roughly 2%. the company missed expectations on the earnings per share level. farmer's sales were up 11%, but most of that was driven by timaflu sales. stell, the company did confirm its guidance for 2010. let's take a look at astrazeneca in the uk. that stock is down by 3.3%. the stock is trading ex dividend today. there seems to be concerns about the company's hubawa cancer drugs. >> thank you very much for that,

carolin. in terms of sectors, we had the energy, resources sector leading the way higher. in japan, the nikkei 225 lose 0.3%. the exporters getting a lift. any upside was capped by toyota shares on a slump. toyota lost apparently 20% of its market value. all eyes will be on the automaker when it announces third quarter earnings tomorrow. today, honda reported its best quarter in 1 1/2 years and rates its outlook. best daily gain in two months. chinese banks gained as worries about heightening in china eased. shares in cnoc surged after its raised its production forecast. widespread bargain hunting, reversing two consecutive session of losses. banks, mining stocks led the gains today. nice session here in asia. carl, back to you.

>> thank you very much, christine. county in singapore. let's get to our task force and talk about how the market may finish out the week. chief economist bob brusque is here and kevin karon. kevin, do you want to explain the new found legs that the market has had since the beginning of the month? >> well, we'll make work on getting your audio fixed in just a second. in the meantime, bob, let's point to some of the economic data. manufacturing looked pretty good. autos obviously had great numbers. people want to tie that to the government's involvement. but you look at housing and loot a people saving more. it leads you to a conclusion that the economy's recovery is lumpy and consistent and may be losing momentum. is that fair? >> no, that's not fair. i think that you look at housing and what you have to see there is that the government programs that were in place and that were being phased out ramped up a lot of activity as people thought that these programs might be phased out.

and then there was a natural fall off after that drop dead date. now, buying a set of programs have been put into effect and they're going to be more positive. so that is very good. what i would steer your attention to in the housing reports, both existing homes and new home sales are that prices were up year over year. that's the important metric to look at. having prices rising in the housing sector is probably the most important thing that you can look at. >> right. >> i think the drop off in volume is statistical. it's related to these programs that were faced out, that have now been put in. housing affordability is extraordinarily good. and if prices are going to start rising, the housing sector is going to be in really great shape. so i think it's wrong to look at that. manufacturing is looking solid. the auto sales are being more steady right now. the automakers themselves are constructive on the outlook for cars. they think the demographics and special features that are going to can all cause people to buy

cars are in place and there's a strong demand there. so i am pretty optimistic on the economy. >> should we pin our hopes, then? should we take that feeling and pint to the jobs number on friday? >> always, we look for something positive when jobs come out. last month was a setback. and the thing we want to look for is to see, there a revision? is there some reason? what happens around the end of recession is that out of nowhere, you get a giant gain in jobs. you look at past recessions. in the recession, you're losing jobs at rapid rates. and all of a sudden, you turn the corner. you're getting down 200,000, 300,000, 400,000 jobs a month. in 1981 in the recovery, there was one month in which we created 1 million jobs. >> are you suggesting that that is going to happen again? >> i'm not suggesting it's going to happen on friday. but i'm just trying to remind people of the kinds of things that happen when recessions ends and recoveries begin. but there's a certain semester

tri that once jobs reach their low point, once you start cutting them or adding them, you put jobs back on at about the pace that you took them off. so remember that. >> if we get any kind of numbers that are spectacular, we'll pull that sound. >> give me a call, yeah. >> kevin, tie this into how the market has behaved over the last few days, if you would. >> i think what happened is we had some concern a week ago about greece and spain and pore tu gull that put pressure on the currencies and china cutting back their intention to expand their credit as much as they have been. that also created some worries. but i think over the weekend, i think traders have looked at the situation in europe and realized that either the eu or the imf will somehow find a resolution for the currency issues and the deficit issues in europe. >> yep. >> and that gave the market some relief and a recent rally. >> so is this dip, can we put that in past tense, then? >> well, we have had a more positive outlook.

i've been listening to what bob has been talking about. all of the indicators that we look at on u.s. economy and foreign trade, we're seeing have sme good momentum in that data and as long as that holds up, we think this rally is sustainable. >> so it soindz sounds like you might be able to back up joe's wish, forecast and call for the end of the quarter the. >> oh, i'd be looking for 1300 by tend of the year and that's predicated on the kind of scenario that bob laid out there where the data continues to come in strong. so if bob is right and we get the strong job growth that he's talking about, 1300 is doable by the end of the year. that would be our target. >> it would be nice, bob, to bury the greece worries or at least sweep them under the carpet, right? it would be nice to get some reassurance that there's not a huge aets property bubble in china. >> there are a lot of problems like that. china, the property prices are -- they look very, very

toppish, very executiverish to me. and then you always have to beware of greece bearing debt. >> we'll see what the eu says today about that very subject and whether or not their recommendations about what needs to be done can get done. bob, kevin, we'll see what happens later in the week. thanks, guys. >> thanks, carl. >> it really will only be my prediction if it comes true. does it doesn't, i was quoting someone that i felt some empathy with their position. i felt empathy with their position. i could see the benefit of what they were saying. >> the wisdom. >> the which is come of what they were saying. >> i believe he you. >> coming up, why bill ackman says why he prefers borders to barnes & noble. first, though, a look at yesterday's winners & losers. 144 years of financial stability.

and still no one knows the sun life financial name. that changes today. i hear you're the clown in charge. so, cirque du soleil becomes... ...cirque du sun life. because soleil means sun.... (gibberish) i'll take that as a yes. (announcer) sooner or later, you'll know our name.

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welcome back. the february bound continues. futures are close to the flat line as we await jobs data and corporate earnings. bill ackman tells cnbc he prefers borders to barnes & noble. we're not talking the actual retail space. ackman offers there's a low probability of a borders bankruptcy. he sees the risk-reward more attractive for that company. borders was up last night some 33 cents. honda motor rising guidance above expectations. the automaker reporting its strongest profits for a year and a half and says it anticipates further growth in the next financial year. honda says the resultser driven by cost cuts. although as we know, they're

ailing from benefits of toyota, as well. >> why are we -- because we saw it on cnbc? it's a high profile marketing race. >> it's a penny stock. we've mentioned it twice. >> let's get our national weather forecast this morning. scott williams is here with what we can look forward to in the coming days. a little bit of snow on the ground up here in the northeast, scott. >> yeah. a little bit of snow and that's about it. this storm system continues to move out to sea here. new york city, flurries lingering. boston all the way around the cape cod area, seeing some of the snow. but it continues to exit the northeast. but we could see a nor'easter potentially in the northeast by the upcoming weekend. san antonio, heavy rain for you. corp. yupus christy, as well. this will continue to move into the houston area as the day progresses. let's expand the view and look across the nation at some of the areas that we're watching, as well. you can see lingering snow showers in the northeast, heavy rain in texas and more rain and snow as you move in the pacific

northwest. as far as some expected delays, moderate, seattle, phoenix, new york city, maybe lingering effects due to that snow. looking at the map here, it looks ominous here. but most of the snow is coming to an end. boston, new york city, temperaturewise, 37 for your high in new york city. the nation's capital saw a lot of snowfall overnight. 42 will be the high temperature there. most of the northeast quiet. 55 for your high in atlanta. the rain moves into the dallas area later on this afternoon and evening. of course, the results are in, joe and carl. punxsutawney phil saw his shadow yesterday. so go figure. it looks like we'll see six more weeks of winter according to him. maybe becky was right yesterday talking about all the flashing lights because it was cloudy here in pennsylvania yesterday. >> as a weather man, scott, as a professional weather man, you have the right to veto what he says. >> no, no, no, no. >> no? >> you don't, do you? >> this is his one day. this is his one day, yeah.

>> he's the foreseer. >> he's not ams if i had like scott or the american meteorologist society. he's just an animal, right? >> he's a marmot, dude. >> scott went to school for this. >> he knows whether to come out of hibernation about the -- did you see the dogs running before the earthquake? >> scott gets paid to tell us. >> you can't learn what a marmot knows in school. i don't think you overrule the march mott, i don't. >> scott, that's the basis there. >> we should be playing weather man. we didn't cut it. >> no, we did not. we'll get the futures pits in just a moment.

make sure that the revenues come through the tables of the ledger, right, of the income statement. good morning, welcome back to "squawk box" here on cnbc. i'm joe kernen along with carl quintanilla, who you just saw on the mug, although not the greatest caricature of either one of us, i don't think. >> i think you look better than you look on -- >> you think i look better with the split in my teeth like that? becky looks like a bratz doll? becky is off today, by the way, the bratz doll. plus, we're going to head to the futures pits in chicago with a check on the trading day ahead.

then john harwood will join us in studio, a rare visit from our chief washington correspondent. we'll see when he gets out of that, the sphere of the washington influence around the beltway whether he's a different person. we'll see when he gets here. >> yeah. >> or whether he's, you know, sort of got -- >> the fast government. >> gets the data. and then at 8:15 eastern, the adp employment report. first, toe, let's check on today's top stories. and it's not going to be carl, it's going to be me. more troubles for toyota. the japanese government says it has received 14 complaints from japan about brake problems. oh, no, not with the other toyotas, but with the prius. with the prius hybrid. the brake complaints involve vehicles made in japan. however, the u.s. national highway traffic safety administration has received about 100 complaints involving the breaks of the prius. and the new model in the united states, was that not part of the recall prior to this? >> the prius was not initially

part of the recall, no. >> can you get those things going fast enough to where it's a problem that the brakes are --? do you know? >> i guess you would argue that the brakes -- it's really hypothetical, theoretical. >> people hate when i mention that. >> yes, they do. >> bank of america will reportedly add up to 2,000 brokers in the next year. the bank is more likely to train rookie wes b though, than wage a war to hire experienced brokers away from other banks. the bank is said to target mass affluent customers. going for the high end. >> yeah, exactly. let's get to the futures pits right now. brian battle of performance trust capital partners. brian, we all want to know whether the -- what was it, it was about six 6% or 7% on the s&p, the pullback. was that it or do we see where we have these lower highs and lower lows? what do you think? which way is the band going to

go? >> i think you're right. it's a range trade. we got close to a dangerous like 1050. we're getting close to ,000, which would have put a drop in the market. so we're range trading. it's definitely crickets in the interest rate markets. there's not a lot going on. the treshy curve stays steep. the mortgage markets spread in, they go in, they go out. so it's real quiet in interest rates because we're watching, as you described earlier, it's a public policy show. we're watching what's coming out of washington. and the most interesting thing, paul volcker. but i fear that paul volcker might be marginalized because the volcker rule is so open ended. now, there was a supreme court case about pornography and they asked judge stewart, he said, what's pornography? he said, i'll know it when i see it. so i'm afraid that the definition of prop trading will be left to interpretation. if it's left to interpretation and a regulator, the investment banks will drive right through that and nothing is going to change. so i think volcker is going to have to assert himself in

demand, a more institutional of glass steagall. i think that is what he's pressing for. i don't know if he's going to get it. >> i'm glad he said that. some of these things that were said, you can use them again and again. let me ask you, though, brian, at this point, i think the market -- and the interest rate environment you were talking about, we're reeling from that last employment report, which that threw a wrench in to all the works, didn't it? even australia seems like they're going to wait and see because this -- no one wants to nip this in the bud after what we were through, right? >> right. well, we've had -- we're getting a lot of -- most of what we're getting out of washington is uncertainty. tax policy, looks like taxes are going to go up. >> you want to hammer washington today. >> no, no, no. it is. it's what we have to react to. you know, we're slaves to how big banks can be, what are they going to pay for in taxes and how can can they prop trade?

washington is defining the rules. i think why it feels like we're in a range is we're waiting to see what happens. barney frank reported a 1100 financial reform bill that is his version. chris dodd is trying to push his uphill. that has to be merged so we're waiting to see what the rules are. >> and they only have 59 votes now, too. so anything that gets done, you don't know whether it's going to go through, anyway. now chris dodd is -- this is what i guess would happen with term limits. people would maybe vote their conscious. he doesn't care about re-election, so he's saying what he actually feels, which is a whole new concept for those guys, right? >> you're right, joe. it's good and it's bad. it's good that he can let his feelings show, but everybody knows he's in duck. if they can wait out chris dodd, they can wait out and see what happens next. he has to be pushing it uphill there. i think the white house is behind him. but here in the markets, we're waiting to see what happens and i think that we're stuck with interest rate policy. we're not sure what the fed is going to be in and out of the

market. and here is your answer. we're going to find out what happens in interest rates when the fed starts buying into mortgages. that's the next piece of this kwaubt tafb easing part that they're in. we'll going to see if rates go up 35 basis points or 100. that's when we're going to start getting some movement. when the fed leaves to actually buying bonds in the market, we'll see where the real interest rates are. >> why would it be that dramatic, brian, if they've done most of their buying and we all know when it's going to end? why is that going to come as such a shock? >> they're a steamroller. they're buying all the mortgages in the market. it's not like they're a big player. they have a huge position and they can -- when they decide quantitative easing and over, they can do something with those markets. so it seems like they're going to leave, but there's the

political reality that if interest rates go up 100 basis points, will chuck schumer and dick durbin let the fed not start buying mortgages again to push rates down again? there will be a political measurement that the fed might have to be encouraged to go back down there and get in there and do something. and that's keeping everyone on pins and needles because we don't know if they leave if they're ever coming back again. i think you're probably right, you know, we see it coming. there's not a lot of pressure in interest rates and people are reaching for spreads. they're bile mortgages at 7% because treshble rates are at zero. 2-year rates are at 2.5%. so that should keep the lid on it a little bit. >> i think chuck schumer is a little distracted. don't you think? >> off the big/buy larry kudlow percentage? >> larry kudlow for senate, that would be great. >> he's coming, the great american is coming.

>> i think schumer has some other things to worry about at this point. >> sure. he's across purposes, too. he wants to be populist and say what's ride right. but he also represents new york. this is the financial senator of the world. so he has to be dancing a very thin line there. he might be on the wrong side of it. i think the market wants to see washington out of the way. >> we can feel it. we're back on the east coast, brian. thank you. appreciate it. questions about anything you see here on quack, e-mail us, squawk@cnbc.com. news making headlines inside as well as outside the world of business, when we come right back.

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we have a special visitor in studio this morning. john harwood is joining us here. although not everything is out of washington. how about in illinois? >> republicans got the nominee they wanted. mark heart. and the state treasure on the democratic side is somebody who a lot of democrats have seen as

not quite great a candidate as what they might have had. what is he viewed at? we've had him on the show a lot. he seems reasonable. is he too middle of the road? who do they want? >> well, some in the white house were concerned about the resco ties. and that's not a subject that the obama white house would like to linger on. >> for their own interests. >> and also for the party in general. he beat this guy, dave hoffman in the primary yesterday, who has somewhat less baggage. >> how about janeuvius? >> you've probably got it down better than i do. >> we have not played.

i can't play basketball. >> no, no. i can't dance or play basketball. really. >> john can do both. >> becky can outquick him, though. >> yeah. >> how about the dodd stuff coming out? >> you know, chris dodd expressed his support. on the other hand, he has a heavy load to carry to try to get a bipartisan deal in the senate and he expressed some concerns that you have the bank tax, size and scope late in the game and it's no so easy. i think that it's possible that the bipartisan talks are going to end up going nowhere and democrats will try a more partisan bill that may or may not succeed or certain provisions of it may or may not skis. but democrats are looking to go populist in this 2010 election. dodd has less of that incentive because he's not running for re-election any more. we'll see how that plays out.

>> you couldn't do reconciliation auto this, could you? >> no. but is it possible to get cosponsorship by shelby and it has a broad bill that has a significant number of republican votes or do you have a financial regulation bill with just a couple of republicans and you hold your democrats -- >> could you do the volcker thing with bipartisan? >> well, you know, it's interesting. shelby is from alabama. there's some conservativism in the south. keith into that proposal? possible. he can't come outright in opposition. he said he's open-minded about it. we'll see. >> you know, with dodd not having -- not running for re-election, is he less likely to try to make his financial services constituents happy at this point? connecticut, do you know how many financial people live in connecticut? greenwich is the home of all the

bonuses, maybe. >> well, i think there's two conflicting impulse hes for dodd. one is there is a truth-telling impulse. >> which is never seen in washington. >> it's revolutionary. but the second thing is, he wants an accomplishment. many senate xhs or chairs want accomplishments. there is no next year for chris dodd. he has a decent working i happen are relationship with shelby. they have teams of senators working on particular issues. so i would still think at the end of the day it will be difficult for congress to walk away before the regulation without a financial bill. we don't know what's going to be in it. >> quick note on health care. the health care reform about it bill because called a collapsed souffle in the back of an empty kitchen. is it that dead? >> no, it's not that dead. there were meetings yesterday at

the white house on this. there were backstage negotiations where democrats -- and i think they're feeling more optimistic today than they did a week ago that they can get this done. they are trying to complete the process they were going through under the old process, whether they have 60 votes in the senate. if they can reach those agreements, which they were likely to reach, anyway, before massachusetts, mek pass those under reconciliation and then the house would pass the original senate bill. that is how it could work. the questions are, can you get 218 house democrats to vote for the senate bill with those changes and can you get 51 democrats to be willing to use reconciliation to make the whole thing ksh. >> so is that a springtime narrative or summer or -- >> no, i think it's springtime. i think we're talking about something -- if this comes together, i think we're going to know it within two months. >> two months. >> not by the state of -- the by will not be signed by the state of the union? >> there's no chance of that. >> next year, though.

>> next year's state of the union. >> what brings you to town? are you in the office all day? >> i'm here for about half the day. we'll talk into obama's event at 10:00 and, you know, i've got some meetings and stuff like that. >> meetings? meetings? >> yeah. >> okay. all right. >> with record labels. >> i wondered. all right. thanks, john. >> "dancing with the stars." >> it's a chronology now. first we get challenger, then adp, then we get claims and then the big grandaddy of it all. that's another thing. saddam hussein said mother of all. we are working for you all morning long on "squawk box." >> but first -- a tech industry all-star, ready to take on cisco earnings and much more. power up your routers,

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sis cisco reporting results today.

who's more bullish, raise your hand. is anyone bullish? what do you think? >> i'm not raising my hand. >> you're not raising your hand? >> i'm pretty bullish. >> you are bullish. >> yeah. >> because, you know, we get mail from both sides, too bearish, too bullish. let's start with the bearish side. why? >> i do have an outperform on the stock and i like cisco. i think the fundamentals are great. what makes me nervous is the market psychology lately which is something i'm struggling to understand. yes. you look at a company like intel, reports good numbers, good guidance. all good, stock goes down. and i think with cisco, we've seen the stock as somewhat weak during earnings season for the december companies. and i think their results are going to be good. i think sales will be certainly better than our estimate. towards the high end of guidance. i think the forecast is good. all good news. but is it enough to keep the market excited? >> i mean, is the networking

sector in recovering mode in a big way? >> yes. the fundamentals are certainly good. and that's really what we focus on. from a top level, you've got good traffic growth. the service provider vertical, you have at&t forecasting capital spending growth. these are things to get excited about. >> simon, would you normally get involved -- you're addressing technical undercurrents in the market with technology, not cisco's fundamentals. is that what an analyst typically does? >> no. i'm a fundamental analyst so my rating is focused on the fundamentals and the fact that -- >> so a good number doesn't necessarily move the stock higher, but the industry and the company's -- the grounding of the company look good to you. >> absolutely. i have a hard time making the trading call of what to do with the stock over the next 24 to 48 hours. but with a six-month view, we like it. >> all right. jason, what do you make of all that? do you agree? disagree? >> i think you just have to be a little patient. i think we're in a trading range type of market right now.

you know, we've got to work through this and muddle through it, but i think if you look at the multiples that cisco trades at, they're trading at close to five-year lows. i think the fundamentals are very strong. i think if you have patience, i think this stock's going to work. the fundamentals are better than they've been in a long time. you've got large enterprises starting to spend again. there's a lot of catch-up spending. there's a lot of big strategic projects that i.t. departments have been unwilling to do because of budgets. so i think, you know, overall, the picture is really bright. and i think john chambers is probably going to turn it up a notch or so on the optimism. so hopefully we'll get some people starting to believe that this macro recovery is real. >> is it now going to be not just networking but, you know, scientific atlanta deal and all the home networking that -- is the future here yet for cisco? >> i think the consumer side is really not that critical to

cisco. i mean, they talk about it, but i think, really, the key for cisco is the core enterprise and service provider businesses. >> yeah, no, i agree. the consumer side is a small portion. it's exciting. and it's easy for people to understand, you can take it home with you. >> all right. gentlemen, thank you. thanks for coming in today, simon. >> thank you. >> jason, we appreciate your time this morning. maybe we'll switch next time. you can come in and we'll have simon on remote. >> sounds good. sounds good. >> thanks. >> we try to keep things fair. >> you like to shake things up. crazy. >> bullish. yeah, i'm insane. i'll do anything at any given time. when we come back, we'll get some top stories this morning. plus, huey lewis not the only one wanting a new drug. pfizer set to report quarterly reports. we'll get the numbers and the analysis on bfe in just a minute. , in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research

and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.

stocks snapping back. two straight days of triple-digit gains for the dow, but can bulls remain in control or the bears about to awake from their winter hibernation? bonus backlash. aig about to pay another $100 million in bonuses while b of a is raising base salaries. have the banks gone tone deaf to washington's requests? pee-wee, listen to reason. come on! >> i'm listening to reason. >> and channeling media stocks. newscorp, comcast, time warner, all reporting quarterly results to their prospects for 2010 and how you can profit as the second hour of "squawk box" begins right now. ♪ video killed the radio star

♪ video killed the radio star all right, good morning. welcome back to "squawk box" here on cnbc. we're getting numbers from dow component pfizer. 49 cents a share. looks about a penny below expectation on revenue of $16.54 billion. that is above expectations. the company is getting some guidance now. they see full-year reported revenues of $67 billion to $69 billion. and then there's also some other -- adjusted diluted earnings per share of 210 to 220. i think we've got a 227 estimate at this point, talking about -- yeah, and then there are other numbers. there's a lot of charges. other items in here that make it difficult at this point to analyze what's happening here, carl. are you looking at it as well? >> comcast is also out.

with just a couple of headline numbers. let's see. 33 cents, i think, the headline number. revenue for the quarter, $9.07 billion. free cash flow, $768 million. as of december 31st, video, high-speed internet and voice customers totaled 47.1 million customers. >> the company, at least, is talking about exceeding expectations in both the full year and the fourth quarter on most metrics including earnings per share, revenue, hsd net ads, digital net ads, rgus and total video, also total revenue per video customer. i guess free ash flow per share and earnings per share are the things that people key off of. increased cash flow, i guess, in the period was 21% versus '08 to $4.4 billion. also, 23% on the full year earnings per share number of

$1.53. >> so we've got comcast. we've got time warner earlier in the morning. newscorp last night, a lot of media companies out today. >> yeah, pfizer at this point, not much -- not much movement in what we're seeing. $19.01 to $19.20 after a close of $19.06. i didn't see anything about the dividend either. it's about a 3.8% yielder, pfizer is. >> yeah, we got a div out of time warner earlier today. here's your rundown for the morning. it's all about jobs. in addition to earnings, we have the challenger survey on job cuts. his name is challenger, which is interesting. it's john challenger. that's why it's called -- >> who's christmas, though? >> he's joe christmas. you've heard of him, right? >> we should interview christmas sometime. >> leading up to the adp report -- you're right, where is he? st. joe christmas? adp is at 8:15 eastern. the president laying out a plan

to spur community banks to increase lending. cam fine of the independent community bankers of america. that should be interesting to talk to him about this. he's probably okay with no proprietary trading, don't you think? >> you think so? yeah. >> because that's what most of his guys do. the smaller institutions. also, making money in media. newscorp out with earnings after tuesday's closing bell. time warner and comcast out this morning. we're going to take a closer look at the media sector. first a look at this morning's top headlines. >> futures looking good at least for now. we've got green arrows overnight, putting together two consecutive triple-digit gains for the dow, something we have not done in about four months or so. we're back on bonus watch this morning. there it is. aig planning another round of bonus payments worth a total of $100 million for current and former employees of its troubled financial products division. the bailed-out insurer will start paying out the bonuses as early as this week to employees who agreed to accept bonus reductions. meantime, b of a's going to pay investment banking employees

bonuses of about $4.4 billion for last year. it's an average of $400,000 each. and the board approving base salary increases for its ceo, brian moynihan, and two other executives. moynihan's base salary will go from $800,000 to $950,000. a two-day turnaround for the markets. the s&p posting its best two-day session gain, as we said, since october. bob dahl is blackrock's vice chairman, and barry knapp, the head of u.s. portfolio strategy for barclays. guys, good morning to you. >> good morning. >> bob, it sounds like looking at both of your notes, bob, you're still looking for the cyclical bull to be intact. barry, it sounds like you think we're going to have a bit of a pause here while we sort of digest the process coming to an end, is that fair? >> no that's exactly what we've been expecting. as the liquidity gets withdrawn and concerns mount around how the market will react to the end of qe, how it will react to liquidity trading that comes

thereafter, you know, the market will go through a period of consolidation probably lower lows and lower highs. it will look much like the first half of 2004, which is what we've been watching for some time. he think by the time we actually get to the rate hikes, that whole process will be complete. and the market should be in a pretty good position. so we've been, you know, sort of cautious on the first half, more optimistic on the second. >> do you think that -- do you think that process is already under way given what's happened since the beginning of the year? does that explain january, in other words? >> it does for me. i mean, it started with chinese policy tightening which gave us a pretty goodw window. by the time you get to the march, april time frame, china's going to have to take the next steps. the fed should be draining liquidity. we may even get the ecb withdrawing programs. so that should be probably a reasonably difficult period. i realize after it started with chinese policy tightening, it morphed into policy concerns and

a host of other things. but it really began for me with china's tightening. >> what do you think, bob? >> i don't disagree with that being a bump along the way, but i think the broader story is economic recovery, earnings pickup. we're talking about the fed moving from very accommodated to just less accommodative. we have a pretty accommodative fiscal policy. we have earnings estimates moving up. we have revenues starting to improve. we're early in this cyclical economic recovery. >> what signs -- i mean, you pointed to a few. but do those things give you clues, bob, that this is real, sustainable growth that is not dependent on policy? and does that mean we're in for some surprises to the up side on jobs? >> i think we will have job growth kind of any day now after a long period of drought. but you're absolutely right. aggressive government stimulus, monetary and fiscal led to cessation of inventory drawdown. that's a lot of what the fourth

quarter was about. we'll get more of that. we've gotten some final demand. i suspect we get some more. add to it the strong productivity, and i think that's a recipe for job gains, yes. >> barry, what do you make of the idea that -- i mean, people want to point to the 5-7 gdp and say it was flattened by inventories. those who have long said that the final demand will not be there, this is all part of a big inventory correction, how are they wrong? >> that's how every recovery just about in post-world war ii history has started. it begins with, you know, it begins perhaps with some stimulus. that was the story in q3 with cash for clunkers. then you get the inventory replenishment. that leads to bigger labor income. consumption starts to pick up later on. and that's how recoveries become self-sustaining. so i'm absolutely in bob's camp around the macro economy. i think it's gaining significant momentum and going to do likely much better than people think. >> so in this period, in this first-half period, barry, where you're expecting the market to

maybe ease off a bit, you're going, what? you're selling cyclicals, buying defensive stocks? >> for the most part, yes. i mean, one of the big factors that we think has played a role in what's happened even within the last few weeks has been, you know, that second derivative of earnings expectations, net revisions. in the case of industrials, the recovery is really just getting started. you're just starting to see revenue gains and industrial earnings have been quite strong, and the sector's been responding to it. technology, on the other hand, which is, you know, very overowned and overloved, you know, that second derivative of forward earnings estimates is not moving higher. you know, there are still a couple cyclical sectors we like. but during the period of consolidation or adjustment to policy normalization, defensives should outperform. i agree with bob, though, in the long run, once we get done with that in the second half, it's going to be cyclicals. >> in the shorter term, bob,

barry points to this sort of strange dynamic we have going on in tech. i know you've been a longtime fan of tech. but they continue to post great numbers. and yet they're one of the biggest laggers at least in this recent correction. >> yes, no question about it. i agree, they're overloved at the moment. but as long as those earnings keep coming through, the stocks eventually will do better. you can't help but be impressed by the new products cycle at companies like microsoft and apple. and our guess is after this pause, and we would add on weakness, these stocks will come on again. >> interesting. someone told me yesterday the nasdaq has not had a winning february since 2003 which was a surprising statistic. bob, we'll see what happens as we get closer to jobs friday. thanks, guys. talk to you later. >> i'm looking at pfizer which is now down about 2%. it's come back a little. it was down 1.9% at one point. it was $18.90 to $18.95.

the problem with pfizer, in addition to being a penny below on that number, was in the guidance, which is slightly below the -- where the street was. the street was at $2.27. they're talking about $2.10 to $2.20. lipitor is always the one to look at. $3.1 billion of lipitor sales. $3.18 billion. that was up 1%. the revenue number for pfizer was actually above expectations, even though they were a penny shy. and then comcast, not bad here. i think 33 -- there's a lot of metrics used. and the bottom-line number isn't necessarily the one to use. but it is well above the 27 cent estimate. it was 33 cents. and also, the revenue number, they managed to beat there as well, 8.9 -- yeah, i'm sorry. actually, i think it was above 9. i'm looking at the number here on the -- yeah, it's over $9

billion for revenue. >> yeah. >> $9.1 billion versus an $8.965 billion. where comcast will open this morning. >> nice growth, though, adding 410 digital video subscribers, up from the 247,000 it added last year. >> wait a second. what do we got there? >> what's that? cmcsa? >> yeah. i don't know what that was. anyway, i can't tell where it's going to open. was that a trade? bring that back up again. was that really a trade on that chart? did you see it? it was over 18. is that for real? >> is that fresh? >> i don't know. that would be a big move because we closed at $16.29. we'll check that. that would -- you haven't seen comcast move like that in a while. before we get too excited about it. we'll check to see whether that's a good number. comments or questions about anything you see, e-mail us

squawk@cnbc.com. up next, steven rosenberg joins us on the set. more reaction to comcast and pfizer when we return. time now for today's "aflac trivia question." which american president died on this day in 1924? this is not more benefits at greater cost to your company insurance. this is not how does it fit in my company's budget insurance. this is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all. if all you know about us is... aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit getquack.com

now the answer to today's "aflac trivia question." which american president died on this day in 1924? the answer, woodrow wilson. >> aflac. i can at least tell you that there was a premarket trade of 200 shares at $18.98 on comcast. after reporting numbers that were well above expectations. in fact, more than double year ago earnings due to solid growth in subscriptions and a year ago writedown. 33 cents was well above expectations. it's $955 million. it does include a tax benefit of 4 cents a share. so if you back that out, it would be 29 cents. but it also -- last year's results also included a writedown of $600 million. so if you exclude some of those things, it's still above. and the top line rose 2.9% from

last year. 200 shares, maybe not that much to get excited about. but, you know, someone paid that. we'll see. >> one vote of confidence. >> we'll see where it opens when it does. joining us for the next two hours to give us his thoughts on banking reform and many other issues is steven rosenberg, ceo of graystone and company, one of the top leaders in fha mortgage originations and also owns graystone bank. good morning. >> good morning, joe. how are you? >> i'm good. it's great to have you in here. we were just talking earlier, before we get in a more general discussion, we had someone talk about the worry that later this month or next month when the fed stops intervening in the interest rate arena with mortgages, we're trying to figure out how much mortgages go up. what do you think? >> well, i'll tell you, from our perspective, we're seeing lots of interest now in the jimmy may securities that we're issuing,

fannie mae securities that we're issuing. we're pretty optimistic. >> the training wheels can come off? >> well, maybe one of them. and maybe we can get a little air out of the training wheels. we're definitely seeing a lot of additional interest, especially on aaa-rated and highly secured securities. >> so we shouldn't assume that the bottom's going to fall out of the mortgage market when the fed exits? >> you know, i don't think we should make that assumption. but i think as the fed exits, it's probably not a bad idea to do it slowly and not just to wake up one morning and all of a sudden, you know, papa's not there anymore. >> we've seen some financial reg -- i don't know where it stands. you need a -- i don't know how many pages you need to try to summarize where washington stands right now on financial regulation. you know, the house has one. the senate has another. mr. volcker has another.

what's the right thing to do, and what do we finally end up with, do you think? >> well, clearly, what needs to happen is that jobs have to be created. it seems that most everyone agrees that in order for jobs to be created, we've got to get lending out to small businesses. the question is, how do you get banks to make loans to small businesses? i think, you know, it's questionable as to whether or not throwing money at banks makes them make loans to small businesses. i think that there are other things that can be done. clearly the sba has to jump into the picture and expand the type of lending that they do. but, you know, it's really -- i'm really unsure as to whether or not just giving banks money is going to force them to make loans. i think that's the one thing that t.a.r.p. has proven to us. you can give banks money, but you can't make them lend. >> because they're too nervous to lend or there's no demand for

lending? >> i think there's absolutely demand for loans. but i think banks are very nervous. we own a bank. and i have friends that own banks, and they have senior positions at banks. and the bottom line is, everyone is worried about the regulators. you know, you make loans. you know, the regulatory environment is tough right now. the examiners and the regulators at the fdic and the other regulatory agencies are just doing their job. and they're trying to be careful. >> it really is a push/pull kind of thing, right? government wants you to. the people want you to make loans, but meantime, you've got people like the fdic saying, whoa, easy, we need to keep your books healthy and intact. >> absolutely. absolutely. and that is a dilemma. because we're hearing from washington, you've got to make loans. but there's definitely a pressure on the regulatory side

to be extremely careful, and underwriting is tightening. >> we'll have more with steve in a second. let's get back to pfizer, reporting fourth quarter results that look to be about a penny shy. joining us now on the "squawk" news line, analyst -- "squawk" news line with instant analysis is katherine arnold, u.s. health care sector leader at credit suisse. is something troubling here, catherine, in your view? it's down a little bit premarket. it was a penny shy and also maybe the outlook was conservative? >> well, the outlook was expected to come down. quite frankly, the 2012 numbers were precisely what everyone was most interested in in its results. there's been a lot of speculation the company was going to adjust that. quite frankly, the 2012 guidance is better than what consensus is expecting. consensus was looking for -- actually right now less than $61 billion in 2012. and an earnings number of $2.23.

so the guidance is 66 to 68.5 for revenues. so it leads a lot of optionality above that 61 number. obviously, the $2.23 is below the bottom end of the guidance for 2012. the most important thing, i think, in talking to investors looks good. 2010 eps guidance is lower than what the street was looking for. however, the revenues are solidly, you know, are solidly above. and it seems as if there's some expenses that are heavy, which is a factor for the fourth quarter and perhaps a factor for 2010 guidance. and so we'll be looking into that at the call. >> revenue thisin this quarter a clear bet and the bottom number was a penny shy. same thing for next year. you figure that's some kind of expenses? >> yeah. you know, the sg&a margins were extraordinarily heavy. and some of that's currency. but not all of it's currency. >> when is lipitor -- when does that go off? >> november 2011.

it really impacts the 2012 number. >> you know, i was looking at it, catherine, and all the emphasis -- you know, you go from a lot of, you know, projections for 2010. then the company goes wild on 2012. so i figured that was it. so everybody -- everybody is keying off of post-lipitor and what pfizer does. >> yeah. 2012 is the worst shape of what the company will be in. then you can start saying is will get better from there. that's the focus on the stock. >> and wyeth, that acquisition was to try to plug some holes from the expiration of lipitor, right? >> yeah. and change the fundamentals of the business, biologics business was important. >> that cost money to integrate it, right? they mentioned wyeth costs as well. >> yeah. you know, timing of the integration processes is always a little bit tricky. we did expect 50% of the synergies to be taken out within 12 months based on guidance. so we would expect some expense reductions.

but the exact timing, quarter by quarter is always a little bit, you know, a little blinded to that. >> other than valuation and the yield, is there any reason to buy cizre, seeing as how we're all waiting around to see what happens in 2012? >> what actually is the reason is this whole issue of 2012 guidance, when you have such a big gap, even with lowered guidance which, again, was widely expected, and the question was really how much would be lowered or not, if it would be lowered, you know, you're talking about a gap of $61 billion to a range of 66 to $68.5 billion. so if you even believe they can fill that partially, then you have to say there's up side in the stock. they also have programs reporting out this year, two big ones next year. and the numbers are just peanuts in the models for those. so if any of them come through, that does generate more optimism. and in the meantime, you're probably going to get steady increases in the dividend. so there is a value case for the stock. we do like it. and we think that those are some of the reasons why it will work. >> okay, great.

catherine, we appreciate your time this morning. thank you. >> no problem. thank you. a lot going on between pfizer and the comcast numbers. still to come, we're going to visit chicago's trading pits for a look at today's trading. later on, community bankers getting much needed help from washington to start lending again. we'll see if that money is wanted or can be put to good use. the president of the independent community bankers of america, cam fine, will join us in just a bit so stay tuned. as we head to the break, here's a look at the widely held stocks.

whoa! it's me. carl wants to talk more about comcast, don't you, "q"? >> yeah, let's bring david joyce in on the "squawk" news line. david, good morning to you. >> morning. >> first off, on the number itself, 33 versus 29. were you including this 4 cent tax gain? what was the number you were going with? >> yeah, if you take the 4 cents, we were 27 cents. so it is a beat by 2 cents. >> okay. and in terms of the dynamics of the quarter, it sounds like it's

all about high-speed internet subs, right? and sealing some market share that they had lost earlier on in the year. >> yeah, that's the same story that's been going on here. that is the strongest of their products. voice customers also were pretty strong. they added just about the same amount of customers, over 240,000. those were just a little under our estimates. you know, the negative is that they're still losing basic subscribers. they lost 199,000 which was not quite twice what we were expecting. but that's the same kind of story we heard out of time warner cable earlier. >> of course, not as many losses as they had in the year-ago period. is that just a reflection on what's happened to housing or what? >> it is a deceleration because, yeah, you don't have people moving. so there's not an opportunity for people to wipe their service providers slate clean. but yes, we do have higher unemployment than we did in the prior year quarter. and you have higher housing vacancies. so those are still headwinds. >> what's the outlook of the

stock in your view? >> well, the revenue is a bit above expectations. ebitda was slightly below, same with free cash flow, it was right in the ballpark. i really think that, you know, that they're operating pretty well in the competitive and economic environments. so i think there's a lot of value in the stock. the overhang is still going to be the nbc potential merger and the conditions that might be placed on them. >> yeah, speaking of that, any changes on the notion of how much teeth the regulators are going to have with this deal? i really something in "the new york post" that said these regulators don't have any teeth, sort of daring them to have teeth, you know, to throw in problems in the way. that's what it looked like to me, a blatant attempt to rile the regulators up to say, you know, you aren't going to look at this. are they going to look closely at it or not? >> it's still in the very early stages. the ceos of both companies have

already been in front of congress. and there are a lot of public interest groups as well as nbc tv station affiliate groups concerned about various aspects of the deal. there's going to be a lot of scrutiny. >> seriously. okay. thank you, david. over the weekend i saw that. >> i have no doubt that happens. >> in "the post" said, the idea that obama's -- that the regulators would take a tougher antitrust have more teeth hasn't been seen at all. and people are wondering whether you see it -- >> are they going to approve it? >> yeah, are they going to approve it? the regulators are down there going, oh, boy, the "post" is criticizing us. >> welcome to our modern world. >> welcome to "the post." as you know, we'll get adp numbers in a little less than an hour. first we have the challenger jobs number. joining us, john challenger, ceo of challenger, gray & christmas and our own steve liesman. john, good morning. wow, 70,000, the highest job cut

tally in five months and the first time we've seen a bump since the summer. what happened there? >> well, january is often a very heavy time of year. often the heaviest month of the year, in fact, as companies come back from the slower december. a lot of slowdown there just because of time off. so january number is often high. if you compare this to what we saw january a year ago which was the peak of the recession for downsizing with almost 425,000 job cuts were announced, this doesn't look too bad. >> you guys are not seasonally adjusting these numbers, right? >> no, these are real. >> so i seasonally adjusted them. >> like pour some mrs. dash or how do you seasonally adjust something? >> you look at the change january to december over the 16 years for which we have data. >> that was a joke about seasoning. >> i know. but the trouble is -- >> we have to listen to your jokes. you just bore right through carl's decent joke.

>> i couldn't think of another seasoning. i was thinking, like, another -- i was trying to think of another seasoning. i couldn't. >> compared to past data. >> you really didn't know how you seasonally adjust it, do you, carl? >> maybe if i said tabasco sauce. >> i could have said mrs. dash. >> you've got to take that -- go ahead. sorry. >> is that for real? okay. here's the deal, john. what i'm trying to figure out, it's like a 39% or 40% month-to-month change most times, right? when december to january because of the retail. so it's pretty normal, the number we're seeing here. is the number to really look at the year-over-year change of 70% lower than january '09? >> i do think that that certainly is seasonally adjusted. you take out a lot of the retail which happens every year. it suggests these numbers really are fairly benign. we're seeing the continued kind of flatness in the labor market, not a lot of outflow from

companies, downsizing continues to be kind of something that companies take their restructurings, if they're in competitive pressure, but they're not letting a lot of people go. they're also not doing a lot of hiring. by the way, i think that mrs. dash is the person behind the labor department numbers who does all the seasoning. >> that's a good one. >> making a jab. >> now, that worked. >> but i understood it was a joke. >> that's what i mean, challenger can do it. >> i got. >> john, talk to him. >> john, just real quick, is this a number at 70,000 here, that's possibly consistent with job growth or not? in the overall economy? >> i don't think this number suggests much job growth. >> okay. >> you know, it's certainly saying that we're seeing companies forced to continue to do the cost cutting, to hold their state, to wait and see if they can see a surge in their orders. a lot of retail cuts as they finish their season and they said, all right. this is the time now to take our restructurings. but it was also telecom and

pharmaceutical companies that led the way in the month of january. other companies, certainly under some pressure in this economy. >> yeah, that was the one thing, the retailer made sense, but the telecom and pharmaceuticals, what do you think's going on there, john? >> telecom felt to me a lot of this was verizon, competitive pressure. perhaps from the iphone. pharmaceutical, you wonder if that industry just is, like, laying in wait for what's going to happen in health care. >> interesting. you think the fact that it's not 100,000, steve, john, may be a sign that things are a little bit better than we thought? >> the numbers last month, when i put the mrs. dash stuff on it last month, it was consistent with job growth. and we were kind of -- what are you looking at, joe? >> too late. >> it's too late. it's the timing thing. it looked like it was -- but this number here is higher. the trouble is you get all that noise from the retail layoffs. and the 70% year-on-year change is good because last january, obviously, was a horror show. and this time around with the

retail in it, and you look for what is normally going to happen december to january. and it's a little bit hotter than that. it's a little bit worse than you would normally expect. >> okay. john, thank you for your time. >> sure. thanks for having me. >> steve, we'll see you again at 8:15. >> i'm going to think of a whole bunch of jokes. >> oh, please don't. any comments or questions, drop us a note. our address is squawk@cnbc.com. when we come back, the president making a promise to small banks to get them to lend again. we'll talk to cam fine of the independent community bankers of america. that's coming your way in just a minute so stick around. i drove my first car from my parent's home

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welcome back. take a look at what mcdonald's is going to do today. they got added to the america's conviction bicyclist over at goldman sachs. it is called higher. we think that ask, $64.85, would be an all-time high. target, though, goes to $75 from $73 over at goldman. >> yeah, ten-year would give us a better idea because, remember, in 2003, it got all the way down to $12 or $13. how hard does it get a ten-year chart. to see it on mcdonald's to see what it's done. >> i guess that's a no.

>> let's check on the -- that's okay. let's check on the markets now. peter yestro is at the cme group. what's the all-time high on mcdonald's? can you give that to me? >> you know, i should know that. >> because you're in chicago. there it is. there it is, peter. how's it look technically? it looks like a breakout, doesn't it? it's a chicago company, isn't it, carl? >> oakbrook technically. >> other than that, we've been talking a lot about the eventual backup in interest rates, mortgage rates and everything else. will that be seen as half full or half empty by the stock market, do you think? >> well, if the fed was to job own it correctly and say that they're removing the emergency accommodation and in such a way to instill confidence that we were seeing the seeds of recovery take hold, it could be seen as a very positive, at least from an emotional

standpoint. when you're doing your discounted cash flows and you look at interest rates going up, it's never a good thing. and it would be nice if the actual tightening were to take place and in the face of better earnings so that you don't get a negative move on the stocks as rates go up. >> the jobs number, what do you think's going to happen on friday? >> well, i think we're going to see something pretty close to zero. maybe get our first positive number. we've had some firms come out and start to look for something as high as up 85. but i'm not sure that we're ready to get the fed to start changing policy. they really are tentative. and i can't blame them, given the administration and the amount of people looking for scapegoats right now. i think the fed's going to really want to keep their heads down and try not to make too much noise. so i would imagine they're not going to be too reactionary from any one number this beginning of the year. >> the stock market's had some trouble since the last jobs report. do you think if we got a good

one this time, that would turn this around, get us back in an upward projectory? >> no, i'm going to look at everything again through the prism of interest rates. if we start to see good data, i'm more concerned that the two-year and five-year yields start to go up. i don't think that's going to be good for the stock market. i think it will be taken as a negative in the short term. >> thanks, peter. >> i guess the comment i would make is that it just seems like it would be too dangerous for the administration at this early stage of a recovery to move with interest rates. the down side of raising interest rates -- >> the administration? >> well, the administration in terms of pushing it. putting pressure on increase. >> the fed's independent, right? >> that's true but we're all affected by our neighborhood. >> yeah. >> that we live in. it just seems there would be so much down side to the administration for even pushing or talking about increasing interest rates this early. >> going from 0 to 25?

25 to 50? >> any movement right now, right, i think would be premature. and i think the down side of moving or talking about raising interest rates to the extent that all of a sudden next month additional jobs were lost, that would be blamed on the interest rate move. >> we'll talk more about this after a break with cam fine. when we come back, next on "squawk" -- >> i'm announcing a proposal to take $30 billion of the money that was repaid by wall street banks, now that they're back on their feet, take that $30 billion and use it to create a new small business lending fund that will provide capital for community banks on main street. >> cam fine, the ceo of the independent community bankers of america, reacts to the president's proposal to spur more lending. a lot to talk about here. he'll join us in just a couple of minutes. with fidelity, you can take your trading around the world,

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america. he joins us from where this is all going down, cam, that's in washington, d.c. good to have you back. >> thank you, carl. >> let's just start first with this plan to get some mean in the -- some money in the banks of small businesses for loans. sounds like that's you have been in favor of for a long time? >> yes, we have been in favor of that. and we think if the administration designs this program properly, it could be a big boost to probably upwards of 1,000 community banks. so the key is that the program needs to be designed properly. >> what specifics do you need to see? >> well, we -- there can't be anything to do with t.a.r.p. there can be no restrictions, none of the t.a.r.p. restrictions which has basically tainted that program. those have to go away. also, they need to get the money into the hands of the banks that need the money. there are probably upwards of 1,000 banks out there that could use additional capital that

would both bolster their capital account and allow them to reach out to their local areas and lend. so you need to design this program to get the money into the hands of the right banks and drop all these strings that were attached to t.a.r.p. and allow these banks to use this money to both strengthen their bank and make local loans. >> technically it's not t.a.r.p. money, i guess. but there are those who say it's more like laundered t.a.r.p. money. is that okay? would banks be comfortable taking that? >> as long as there's nothing to do with t.a.r.p. banks will be okay. you know, the "t" in t.a.r.p. stands for toxic, and that's how banks look at t.a.r.p. money. so this needs to be an absolutely brand-new program that is -- it might be funded from leftover t.a.r.p. money, but it can't be associated with t.a.r.p. >> cam, the question for you -- >> sure. >> -- the one thing that we certainly have seen is that you

can give banks money, but that doesn't necessarily make them lend. and so let's assume that the banks did get $30 billion. what motivates them to make loans to small businesses? >> well, obviously, you need two people to make a loan. you need a borrower and a lender. and in many parts of the country, there aren't very many borrow borrowers. there are a number of banks, thousands of banks, that have money to lend. they just don't have anybody coming through the door. so that's one thing. the loan demand needs to pick up in many parts of the country. two, the regulatory environment is very, very harsh. and the regulators are saying conserve, conserve, conserve. and then another side of the administration in the congress are saying lend, lend, lend. so the bankers are caught in no man's land. >> i would agree with you. i think just about everyone is talking about the disconnect between what the administration

is pushing, which is making loans to small businesses, and you have the regulators on the other hand that are saying, you know, tighten the belt, conserve, and tighten your underwriting standards. how do you bridge that disconnect? >> well, they have to get together. there needs -- everybody needs to sync up here. the regulatory atmosphere and the examination atmosphere on the ground is the harshest it has been in probably two generations. and they need to ease up. they need to allow these banks to take some risk. and right now because of the examination atmosphere, banks are very risk adverse. so you'd better be a guilt-edged loan before they'll make that loan because they don't want to sacrifice their capital to an overzealous regulator. >> we didn't even get a chance to touch on the volcker rule which is another topic. >> we like the volcker rule. >> i have a feeling. >> knock me down with a feather. >> cam, appreciate your tame. >> thank you.

>> cam fine. >> i knew that. coming up, avacor partner roger altman at the top of the hour. up next, more on profiting from media stocks. 

big week, big day today. we have newscorp out after the bell last night. comcast and time warning both announcing results earlier this morning. joining us now with his picks is

larry haverty, global multimedia trust. i just looked at a bid on the newscorp, larry, that's going to be a big winner today. >> well, they have all the horses running in the right direction and running quickly, joe. this company has -- it's one of the few integrated media companies that actually has a strong local franchise business between its networks and its owned and operated tv stations. and the local businesses have all of a sudden lifted off, i think, led by the auto dealers. news corp gets that. it also has retransmission consent that it's likely to be collecting possibly to the tune of $600 million with no costs. >> what's that from? >> that's from collecting fees. >> fox news channel? >> no, no, from the fox network

feed. >> fox -- oh, from the actual big fox. >> right. >> the fourth network. >> it looks like they're going to get 50 cents, 60 cents a pop for their owned and operated stations. and that's a very big number. >> between that -- between the retransmission stuff and murdoch's plan to start charging for content, i wonder if you think being ahead of others is going to pay off and if others are going to be able to follow? >> rupert's always been aggressive in his business practices. remember, he started in the newspaper business and really got his spurs in newspapers in london. that was pretty rough business conditions over there at this time. he's never been afraid to be the pioneer. and he's got an enormous collection of very, very good franchises all throughout the entity, fox news, "american idol" and a very, very stable

and i think vastly underestimated management in the film area. and he's never been afraid to roll the dice. the indictment has always been that he's rolled it too often. and i think on the conference call, the music to my ears was that he wasn't going to buy mgm. he wasn't going to buy miramax. so if you get a little capital deployment discipline in this company, they're a little more than they used to be. i think having chased kerry as the chief operating officer chases a former financial guy helps a great bit. the stock could go from 5 or change where it is now to easily over 8 or 9. this company has absolutely great content businesses. and with all the proliferation in devices, joe, what's missed in this is that people are consuming more media. and rupert's got a great mix of media for people to consume, and he's not afraid to charge for it.

>> quickly on time warner, good numbers? >> yeah. i think time warner's like the guy in the major leagues that hits .310. they just -- i was thinking when i looked at the numbers, i can't remember the last time warner brothers had a bad quarter or bad year. >> unfortunately, we've got to try and add to our earnings, if possible, and we've got a hard break in about ten seconds. appreciate your time. i wish we had more time. we'll get you back soon. >> thanks a lot, joe. we'll be back soon with more "squawk box."

setting a tone for the trading day. the bulls in a full sprint. but now a big test. >> what's the point of this test? >> no point. i just thought he could stand to lose a little weight. >> it's almost hypnotic. >> the adm employment report moments away. how the markets react to this fresh jobs data. how much is too much? borrowing too much. spending too much. taxing too much. >> there you go. here you go. here you go. >> former deputy treasury

secretary roger altman will tell us why the nation cannot continue down this path. >> of course, people do go both ways. >> you're not in kansas anymore. "squawk box" begins right now. ♪ eat too much ♪ i drink too much ♪ i want too much ♪ too much welcome back to "squawk" for a wednesday on cnbc, first in business worldwide. we're one hour away from the opening bell. here's the rundown. next, the trading buzz from the floor of the cme in chicago. stocks worth buying right now. and for 2010, will it be the year for social networking? the sectors to watch for the next big flood of ipos. our guest host is stephen rosenberg, one of the top leaders in fha mortgage origination. there's a lot going on. joe, we've gotten time warner earnings. we've got comcast. what else under our belts? pfizer this morning as well, right? >> pfizer. you know, we still look at

analysts' calls. >> mcdonald's. >> with mcdonald's, not too bad. that's going to be, i think, last we looked, that's going to be probably the highest level the stock has ever traded at. if it does get above $64.78 for mcdonald's. and earnings news this morning, let's go over it. pfizer reported 49 cents a share. revenue beat the streets. we talked to an analyst who said there were expenses in there. it is down a little bit. it's really interesting. we're going to give you this information. the 2010 earnings per share is guided $2.10 to $2.20. the analysts we spoke to, 2012, the company kept talking about 2012, giving us detailed forecasts for, you know, a lot of times companies don't have any visibility. however, if you know that the biggest drug that's ever been sold in the world, lipitor is going off patent in november 2011, everything you talk about is going to be 2012.

that's why you acquire wyeth, try to plug the hole in this drug. lipitor did $3 million in sales in the quarter. the run rate is $12 billion or $13 billion. so when that goes off patent, what do you do? >> ask for patents to go longer. >> do an extended-release lipitor. and the 2012 revenue forecast according to analysts is well above where the street is. even though there's a miss here, that was good news. comcast posted better than expected fourth quarter earnings in revenue. and that stock looks like it's going to open right around there. there was a 200-share trade done much higher. but that's probably not accurate. time warner, fourth quarter earnings and revenue also beat the street. and it raised its quarterly dividend and increased its share repurchase authorization. at time warner. the big story involving bonuses today. aig says current and former employees of its financial products unit have agreed to accept retention payment cuts totalling about $20 million.

that's a bit short of a $26 million target. aig had agreed to pay the bonuses early if employees did accept those reduced amounts. the company set to pay out as much as $100 million in bonuses this week. they got a lot of their employees, i thisnk, 97% agreed to these payouts. we have a couple holdouts, though. some people say it's hard to blame them given that they signed contracts a lochk time. >> is the $100 million in the financial products or across the whole company? >> i believe it's largely centered -- >> because the size of aig -- >> sure. >> and -- $100 million -- >> that's, like, office supplies. >> that's, like, paper clips almost for the size of what that company was at one point. so they must be talking about that rogue unit based in connecticut that had the 300 guys that went insane. >> like "apocalypse now." >> wrote all the credit default swaps with no assets. wrote all the insurance without

having any reserves. >> yes. meantime, b of a is reportedly approving more than $4 billion in 2009 pay for its bankers and traders. the journal this morning says the payout is about 19% of the revenue the company made from investment banking. and their capital markets divisions. on average, each worker, each employee is going to get between $300,000 and $500,000. figures said to be close to what b of a paid back in 2006 which was surprisingly the peak year for payouts. so two big stories regarding compensation. aig and b of a today. the $3.8 trillion fiscal 2011 budget proposal is the topic of plenty of discussion on capitol hill and elsewhere. joining us now from new york with his thoughts, roger altman, evercorp capital partners chairman and former deputy chairman treasury secretary. great to have you. >> thanks for having me. >> kind of between a rock and a hard place with this budget. nobody likes it, roger. what did you think of it? >> it's grim.

>> yeah. >> but, joe, it's testimony to the awful mess which they inherited. i think they're doing a reasonable job playing the lousy cards in their hand in their deck. but fundamentally, the budget -- and they say so themselves. give them credit -- is not viable over the medium and long term. by that i mean $5 trillion of assume lifb deficits over the next five years, debt growing above adp within the ten-year period, that's not viable. one of two things will happen. either the leadership, the president, the congressional leadership, will probably, through the deficit reduction commission and its recommendations, address this proactively. in other words, lead on it. or at some point over the next, let's say, two years, i think the financial markets will revolt against it. and this time that might express itself through the foreign exchange markets and instability in the dollar. it's difficult to know when that might happen and precisely how.

but i don't believe this is going to be acceptable for the financial markets over the medium and longer term. >> even in the -- i think it was "the times" over the weekend really laid out, i think went ten years out into the future in what we would be dealing with. and it is a little bit frightening. we've had some people, roger, and i think it was interesting because i think they were republicans. saying if you did do a medicare -- some type of entitlement cut, the same one that was proposed in the health care plan which may or may not -- it's probably not going to happen at this point, but if you were going to do something like that, you actually could address the spending side of the equation. but i don't know if the president can do that because you're already hearing it from the far left that you can't cut anything, right? >> well, one of the other problems there is that, as you know, the congressional budget office, cbo, scored the health care bill as reducing the deficit by $150 billion over this ten-year period. so if you don't have health care, then the deficit projections that the administration just put forward go up by $150 billion.

and that doesn't offset all of the $600 billion or so of medicare cut that were behind the health care bill. but those cuts aren't all that big in the context of, you know, $8 trillion $10 trillion deficits. >> roger, given the size of the budget, is it your sense that what the president plans to do with the money will have its intended effect? you know, from my perspective, if you spend the money but ultimately the economy starts coming back, the government sort of gets it back in taxes. the question is, are they spending it the right way? what is your view? >> well, i think you're asking in part whether the second stimulus that president obama has just proposed, they don't call it that, but that's what it is, makes sense. it's about $280 billion of additional stimulus spending on top of the $787 billion which congress passed last year which

one-third has already been spent. my view is that it is necessary. look at the economic growth forecast, for example, for this year about 2.5 to 2.75 in real terms. look at the outlook. we all know it's going to be double digits through this year. some think it will be double digits through the middle of next year. and i think the case for some additional stimulus, remember, the size of our economy is $14 trillion. so looking at $1 trillion of total stimulus, last year's and this year's, i think is about right. but it's a difficult trick because the administration is saying, let's do more stimulus right now. and then let's put the brakes on immediately after that. a freeze on nondefense discretionary spending and so forth. that's difficult to communicate, and it's difficult to actually carry off. >> i think, roger, one of the more frightening things is the projections they give for gdp in the budget. 4% for most of the outlying years. looking at unemployment coming down to 6% in the next five

years. there's very little room for something to go wrong. in these plans. >> that's right, carl. what will go wrong, at least over the short term, is that, of course, there's a variety of tax increases, and some spending cuts in this budget. all of them have to be passed by congress. and it's not going to be the case that they all will be. so it's likely -- and the administration knows this. that these deficit estimates will move too low in the absence of other action. >> roger, we've got to end it there. we appreciate it. we'll call you and hopefully you'll be able to come on again in the next couple weeks. >> you looked great on "charlie rose." >> thank you, guys. >> you are welcome. >> he saves the good stuff for this show. >> yeah. we are minutes away from the adp jobs number which measures private sector employment. josh fineman is chief economist here with a preview. what are you looking for, josh? >> i'm looking for the report to suggest that we're moving close

to, you know, flattish on payrolls. i think we're edging there, whether we get there this month or it takes another couple of months, remains to be seen. but i think we are improving. layoffs are slowing down. maybe firms are going to start putting a toe back in the water in terms of starting to hire. and i would think we're going to get there over the next couple months. >> an analyst said this morning when you're coming out of recession, the numbers are lumpy. they're not consistent. you might have a bad month followed by a really good month. what do you think the likelihood is, whether it's january or february, of us having a blockbuster number? say something close to 100,000? >> i don't know about blockbuster, but it's true, the numbers are lumpy from month to month. you know, this year you've got some seasonal adjustment problems. january was unseasonably cold. also january's usually a month where a lot of people -- a lot of jobs are lost seasonally. not clear that, you know, a lot of people weren't hired last year, so maybe you won't get as many people laid off. there are all these things. that's why you have to average

through the numbers. you can't focus too much on any one month. but i think importantly the trend is improving. but it's kind of glacial. >> we'll take a quick break. when we come back, we'll have the adp number for january. a preview before the big dance this friday. "squawk" continues in just a moment. ♪ at the end of the day in sitka, alaska, everyone awaits the return of the fishing boats. ♪ their safe arrival is highly anticipated, ♪ as is something else.

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the january adp number is coming out in just a couple of seconds. meantime, futures have lost some ground, i believe, although it's been sort of an abhorrent session. steve liesman has the numbers. >> adp estimating national unemployment in the sector fell by 22,000 in december, the smallest number decline since december 2007. in addition, job losses in december '09 were advised up to a decline of 61,000 from a loss of 84,000. economists surveyed by dow jones for total private and government employment to be unchanged in january. so this is roughly in line with the estimate for adp was minus

30. just in the last segment saying he thought it was headed towards unchanged. joining us, chairman of economic advisers. joel, are we on track for your famous call of positive in february? you feel good about that still? >> you know, i was wondering, steve, whether you remembered that. i do think that given today's number and the recent improving trend in the adp numbers, that it's very likely that employment as we estimated in the adp national employment report is going to turn positive next month. several slices of the data already have turned positive. so we're on the verge of moving from job destruction to net job creation. >> you know, i thought that was an interesting aspect of this report was, you know, month after month, this has been uniformly bad every breakdown. but this time around, for example, when we look at job growth by business size, what we find is that they lost jobs again in the small businesses. but it was media that actually gained jobs.

9,000 and large minus 19,000. what's that trend telling you, joel? >> well, when you get close to an inflection point in the total number, you're going to have some crossroads in the details. and that's what you're starting to see. as you mentioned, medium-sized payroll starting to expand. service sector jobs expanding for the second month in a row. the loss of manufacturing, yes, a loss, but the smallest one in a year and a half. things, i think, are clearly now moving over the borderline towards positive territory. >> you know, i was fascinated by that part of the survey as well which showed manufacturing and goods producing jobs declined 60,000. construction down 37,000. what did they do? they hired -- they fired the last carpenters who were working? i mean, there can't be more than seven guys working in the construction business anymore given the declines you guys have registered. that's a joke. >> at least 37,000 of them working in december who no longer are. >> could that have been a weather thing? >> i will say, with the very wet november and the very cold

december, seasonal adjustment in the construction industry, very difficult this time of year for sure. >> it's amazing. >> i got you. >> there are construction jobs to lose. what's the total of construction jobs lost so far? >> i didn't tally it up this month, steve. >> it's been over 1 million, right? >> it's well over 1 million. >> and what's interesting is amid the stimulus package, which was supposed to have helped that sector, i mean, i guess you could argue that more people weren't fired that would have been, but certainly there's no hiring going on. >> i think i'd be careful about that. the stimulus package, you know, should be a boost to certain kinds of nonresidential construction over a very long spend-out period. the declines that we're seeing now are still sort of the legacy effect of the implosion in the residential construction market over the last 2 1/2 years. >> hard to do things every 30 days. but do you get a feeling now, was november telling us the true

picture, or was december telling us the true picture, joel? >> for what, construction employment? >> everything. >> oh, everything? you know, neither one nor two months' worth of data ever tell you the full picture. >> sort of coming back to zero. >> what i choose to look at here is a year ago we were losing between 600,000 and 700,000 jobs a month. now we're losing essentially no jobs a month. the trend is in the right direction. >> we focus on, the market focuses on it, the november number was such a pleasant surprise. >> the political establishment. >> yeah. >> you know, unchanged is better than it was, but it's not good enough for what's going on in washington right now. >> it's not. it's not good enough. we treat a decline of 22,000 as if it's good news. i mean, we need to create a lot more jobs. and so we should talk a little bit about what we can expect in 2010 with gdp growth pushing 6% in the fourth quarter in at least our forecasts for

continued growth in the first part of this year and given the lags between growth and employment, i do think that we'll see employment starting to move up in the first half of this year, you know, solidly in the positive direction so there won't be any debate that, in fact, we've crossed over into job growth. >> by "solid," you mean enough to give jobs to those who were entering the labor force? >> by the middle of the year, we'd expect to see the unemployment rate starting to decline a little bit, yeah. >> you say end of the year? >> no, by the middle of the year. >> that's not what zandi says, know. >> just remember that the census -- the census department will be hiring a lot of workers. and so there will be a wedge between the adp number and the total bls number in the spring that we'll have to keep our eye on as those numbers develop. >> that makes a difference, too. zandi's got numbers, like, 10.8 or something by the midterms. >> well, let's have us both on at the end of the year. >> oh. wow! throwing it down. gauntlet. >> we spoke to josh fineman

before the break. now that you've seen the number, your thoughts, josh? >> pretty much consistent with what we were thinking. you know, i'd agree with what joel was saying. i think we are moving towards zero. i think we will be in positive territory pretty soon. one other thing i'd point out is the adp numbers are fairly consistently underpredicted payrolls over the last six to eight months. if that pattern were to continue, you know, this minus 22 might be consistent with a positive payroll number even as soon as this month. but i'd also say, you know, you can't put too much on any one month. you've got to look at the trend, and the trend is gradually moving in the right direction. >> let me just use this moment to prepare viewers for what's going to happen on friday which is that benchmark revision. guys, without getting too comfortable, the bottom line here, if i'm not mistaken, is it will show some 800,000 additional job losses because they have better data through the month of march, through the year ending in march '09. josh, talk about that. how that changes the outlook. >> i don't know that it changes

the outlook much. what it does is tell you that the depth of job loss in the recession was even greater. than we had. we dug an even bigger hole than we thought. that's the other thing to keep in mind. in order to get out of a hole, the first thing you have to do is stop digging. and i think, you know, we're getting to zero. we're getting to the stop digging point. but what the benchmark will remind us is that the depth of that hole is pretty amazing. and it's going to take years of very strong job growth, you know, to get us out of that. >> joel, you saw the government's budget projections. what do you think of them? 3.7% growth over the next several years. >> well, they are disturbing. and i think that they are, in fact, unsustainable. and this is, you know, this is a point of reckoning for us, whether our elected officials are going to be able to make the tough political decisions required to put this budget on a declining track. there's a lot of talk about the contribution of the stimulus to these near-term budget deficits.

it obviously has made those deficits larger. but the unfunded liability, the entitlement system, is far larger than the $800 billion to $1 trillion being spent in the stimulus. we're just approaching the day of reckoning on our entitlement promises. >> joel, one other things that people say about the 5.7% growth we have in the fourth quarter was it was "a," just inventories, and "b," just stimulus. how real was that turnaround? >> a lot of it was inventories. and some of it was stimulus. but inventory cycle is a quite normal thing. and the growth of final sales in domestic final sales actually is accelerating. so i think it's a good precursor to continue growth in 2010. >> what's going on between you and zandi, joel, seriously? >> no. >> he's trying to start a little thing here. >> if there is something, we're going to have you on all the time. >> that's what he does. >> i like mark a lot.

he just has a different view, a more pessimistic view. >> would you characterize him as being, like, wrong all the time? is that something you'd say about him? >> i'd never say that. >> just a different view. a different wrong view. >> i just think zandi needs to respond to this. he's not here right now. >> get him on the phone. >> thank you, guys. >> thank you. >> walking us through yet another adp number. >> i don't just do that. >> yes, you do. >> no, i don't. >> professionally you do. >> one hurdle down, another to go. we'll get the buzz. ♪

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welcome back to "squawk" for a wednesday here on cnbc, first in business worldwide. we're an hour away from the opening bell. here's the rundown for this half hour. we'll get the trading buzz from the floor of the cme in chicago. we'll check out big pharma stocks, see which ones might be worth buying. 2010 will be the year for social networking. the sectors to watch.

our guest host today, stephen rosenberg, ceo of greystone and company, one of the top leaders in fho mortgage origination. quickly on futures, did we lose some ground on adp, joe? >> we gained and we're back down. you wouldn't think that there was anything in those numbers that would cause you to -- friday's going to be big. there's no doubt. >> it is going to be a big number, yes. we did lose a little ground. close to the lows of the session at least on the dow which, of course, has strung together a couple of nice triple-digit gains here. we haven't done that since october. that monthly adp number showed the private sector lost 22,000 jobs last month. it's a smaller number than economists were predicting. the revised december number is now smaller than originally reported, showing job losses of 61,000 for that month. mortgage apps now at their highest level in six weeks. mortgage bankers association says applications jumped 21% last week. the surge led by a refinancing wave as borrowers are trying to lock in low rates. let's check out shares of

pfizer, the dow component earned 49 cents a share for the quarter, a penny below estimates, although revenue was pretty good, right, joe? if i recall on pfizer? >> yes. >> despite the miss. >> analysts said something in the sg&a. wyeth, some of that. >> integration costs. >> also, about, i guess, next year as well. the revenue number was good. but the forecast for 2010, the net income number -- or the per share number was a little bit light. but as we said, everybody's looking at 2012 apparently when lipitor goes off patent in november. do you remember what happened to zocor, the merck drug? the minute it went off, it goes down like 90%. it goes from, you know, $8 -- i'm making this up -- but $8 to 25 cents or something. so 2012 is the year. that was the motivation behind the wyeth purchase, to fill the void that will be left by the biggest drug of all time.

pfizer, the biggest drug of all time. i know what you're thinking. i know where your mind is. it's not viagra. it's a big drug. >> i know what you're referring to. >> it's lipitor. let's check out the -- after working with you for so long. let's check on the futures. right now saw a little bit of a selloff throughout the morning. we did get almost positive after a two-day triple-digit gain. i was going to say todd -- rick santelli and todd colvin at the cme group in chicago. rick, if we go from negative from losing jobs to gaining jobs, you need to go through zero at some point. so even though there's no net adds, that will be when we're consistently there, that will be a net positive, right? >> well, certainly it will be a net positive. but i think, you know, what we need to pay attention to, if you throw a ball up in the air, it reaches a certain point where it's not going up and it's not going down. gravity makes sure that point in time is very small. i think that point in time for

jobs is going to be very large. yes, we know we're going to be in the no-man zone for a while. but don't forget, the unemployment rate is predicated on what the size of the work force is. and everybody talks numbers like we will on friday. but the reality is, is that the size of the labor force in the last, well, consistent leaf throughout the year has gotten smaller and smaller distorting the size of the unemployment rate so there's many ways to look at the situation we find ourselves in. >> and rick, for some reason people say they're going to be back in the mix in future months so that the rate could continue to go up towards 11. >> yeah, you know what? i totally agree with that, joe. >> yeah. that's not going to be politically -- and that affects your world because the fed can't do anything as long as we're headed the wrong way. >> well, you're making an assumption if it was going the other way, they would do something, and we can't say that's true either. >> so either way, the spigots are going to remain on.

we've been talking to our guest host today, rick, about taking the training wheels off. he thinks the private sector might step into the mortgage market. do you think that? >> repeat who would step in the mortgage market? >> when the fed starts coming out at the end of this month or march, we still might see enough demand for those securities that mortgage rates don't immediately back up 100 basis points. >> well, you know, there's so many ways to look at this. i believe that freddie and fannie, you know, they have a bunch of extra bedrooms. there's no windows in there. and they're probably padded walls. but i have a feeling somehow a lot of mortgages are going to continue to go in there while everybody says how great t.a.r.p. and the federal reserve are doing by halting the programs. i try to look at it in its entirety. so i don't think you're going to see this big jump in mortgage rates. i do think they will move higher. but i don't see a big leap.

>> interesting. we're reading right now that the number of the sovereign wealth funds are getting back into the market. the abu dhabi investment authority just announced that it wanted to start investing about $10 billion over the next three years, making first mortgages in the united states. i think they're getting tired of putting their money into treasury bills, one-year treasuries now are, you know, below a half percent. and they're looking for higher yields. and i think that happens by getting back into the mortgage market. just buying securities other than treasuries. and so i think the private sector and sovereign wealth funds and other investors are getting back in. >> todd coleman, where are we in terms of this most recent correction that people are ready to call the one, the great one we've been waiting for? >> well, when you say "the great one" -- >> 10%, 5% to 10%, the one we've

all been waiting for for 70 percentage points keeping people out of the market. >> i think right now, obviously, friday's number's going to be very pivotal. and the sense that the market has is very similar to last month. there's a feeling of optimism that the market is expecting a positive jobs number. and for that unemployment rate to stay steady, but i think that the market might be misled here. and i think we could see jobs actually continue to be negative with an increase in the unemployment rate. a couple weeks ago we got news that walmart, home depot, verizon are all having massive layoffs and those will be reflected in quarters to come. i think employment mass a ways to go before we see a mass improvement as well as the unemployment rate. probably on its way to 11% before back below 10%. >> all right. we've got to keep it short with you today. we'll see you again soon, though, hopefully. rick, see you later. >> really quickly, a couple headlines on "the wall street journal." toyota is reviewing their electronic throttle systems. and these claims that

electromagnetic interference might be causing the toyota malfunction. they also say, though, they've found no evidence so far to support causes for this unintended acceleration other than those that are already cited. but they are looking into it. of course, you've got ray lahood on the cover of "the journal" from d.o.t. saying we are not finished with toyota. >> yeah, you can see from the stock. >> yeah. and saying they're already considering civil penalties against the automaker for not making all of this happen a lot sooner. >> right. >> but if this does move into the electromagnetic interference -- >> the electromagnetic -- cutting down the floormat, you know, cutting a little piece off, it would be different than the electromagnetic field around the software for the -- or whatever. that sounds like it could be a little bit more difficult. coming up, ipos for 2010. did it die with the selloff in late january? or is the market just getting warmed up? but next, saying yes to drugs. pfizer, the latest company from

big pharma reporting results. should you prescribe these stocks for your portfolio? "squawk box" is coming right back.

take a look at some stocks to watch. this morning. first on the list we want to look at mcdonald's. this is not an earnings story. this is an upgrade, i guess. it's added to the america's conviction bicyclist. it had been a buy. we're talking goldman sachs.

the price target goes to $73, getting close to an all-time high. time warner reported 55 cents, 3 cents ahead of expectations. revenue was also above. then the company increased its quarterly dividend. it was 13.3%. >> really? >> that was pretty good, i've got to say. anyway, that is going to be a little bit lower this morning. and then comcast reported 29 cents, 2 cents ahead of expectations on revenue that was also above expectations. and that now looks more or less unchanged from yesterday. with health care reform in doubt, pharma stocks could be poised to pop. joining us is health care strategist at miller chayback. i have a problem with that thesis in that drug stocks were totally on board with obama care. out of all the lobbying money, they spent more than anything else for the program. could they be hurt by obama care not passing? >> probably in the longer term there will be fewer people

insured. but i think they had to be on board with obama care because otherwise, you know, they would have been steamrolled. >> it was a long way from getting steamrolled, les. they were at the table early. and they got everything they wanted, right? >> more or less, yes. that's because they chose that strategy. >> they were there before ben nelson and mary landrieu and the unions. they were there at the ama and some of the hospitals. >> keep your friends close. >> right. i think that's right. without going too far into the mafia metaphors, yes. they were there. but psychologically investors didn't see it that way. and they compressed the multiples. >> the multiples got compressed about how long ago, les? ten years? eight years? >> it's been -- it nadered last year in the high single digits. >> it did. >> so we are getting some multiple expansion. and you're seeing these stocks in the transitional mode where they're doing deals and trying

to get their acts together in terms of pipeline, and that's what we're seeing. >> are any of them buys for any other reason than valuation and yield? >> we like merck and novartis and bristol meyers. based on pipeline, they all have new drugs coming out. so i'd say they have things we could key off of to say, gee, these are potential blockbusters. at least revenue increases. just one point on reform, i mean, this reform may be dead for the time being, but we will inevitably get some kind of health care reform because our situation is unsustainable. and other things you've been talking about this morning like deficit and currency are all feeding off of exploding entitlement funds. we haven't heard the last of reform. >> no. and if they don't get there, you might imagine, you know, reimportation. there could be some pretty heinous things coming down the road. and just watching what's happening with lipitor, les. what's a lipitor tablet cost now and what will it cost in january

of 2012? >> well, we always model an 80% reduction over time in revenues. so -- >> that hurts. >> it will be significant. >> how do you run a company like that where you've got a $13 billion a year drug and it goes to -- what is that, $2 billion or $3 billion? >> it's like surfing. you wide the -- ride the wave. >> you'd better find something else. >> those are the numbers they gave us. 2012 are what people are keying on. do you believe those new increased revenue numbers that they put out? >> well, to be fair, we're still working on it. it's a pretty hefty release. we were a bit despondent with 0 2010. 2012, we'll see. there are some things in the pipeline, although they're certainly higher risk than some of the other companies like their alzheimer's compound. with pfizer, we're more likely to take a wait-and-see and give them a little more time so we

can gauge the franchise. they've only had wyeth on board for basically six weeks. >> we've come back to pipelines and blockbuster drugs. that's what you base buy and sell on. and it's always been that way. it will always be that way, i guess, in the drug stocks, right? >> innovation drives share price value. obviously, if you don't innovate, you're going to go away. >> is there a health care reform plan that will not stifle innovation that you know of? >> that is a very tricky question. because if you have reduced revenue, you will probably have reduced innovation. but it's not linear because innovation is sort of a yeurek eureka-sensitive issue. if you pour coca-cola into a petrie dish. >> scorpion venom or something. we're almost at the age of drug design and we don't want to ruin

this right before we get to this golden age either. >> rational drug design's been on its way for a while. >> no promise yet. we've got the genomics. one of these days we're going to design keys for little locks and it's going to happen. >> i believe that's true over time. >> scorpion venom. >> that's the serendipitous discovery, moss growing on it, penicillin, bread mold. >> it's disgusting. >> mostly pretty disgusting. when we come back, do you twiter? do you have a facebook page? are you linked in? when we come back, we are ipo hunting. we'll find out if 2010 will be the year of social networking. first as we go, let's look at the dollar this morning. consolidating a little bit. i think euro is still just a touch under $1.40. rrrrrrrrrrrrrr

welcome back. futures are a little lower after we got adp and challenge numbers earlier on today.

we're still with no definitive answer as to what the jobs number may tell us friday but still awaiting visa earnings later on. cisco as well after the bell. making headlines the operator of hollywood video stores has filed for chapter 11 bankruptcy protection for the second time in less than three years. movie gallery says it plans to close a significant number of its 2600 stores in the u.s. here is a question. will the ipo market pick up in 2010? our next guest expects to see at least a hundred offerings by the end of the year. the president of signal hill joins us this morning. david, good to talk to you. >> good morning. >> a hundred is a pretty good number though people want to look at the weakness in january and say we're not off to a flying start. >> well, if you look back over the last ten years, january on average has been the lowest month of activity for ipos by a large amount both in terms of number of deals and dollars, and i think there's a couple reasons for that. one is there's a number of companies whose fiscal year ends

in december and they're waiting to get their final year audit. in a period like we're in now, you know, not every company, even the good companies, had great growth in 2009 versus 2008 and i think they expect to have better growth this year versus 2009, so the longer we get into 2010 and prove that out, i think the better it will make these companies look. and then, finally, as we get to the middle of the year companies can start to attempt to get credit for their forecast for 2011, which would help their valuation. so there's a lot of reasons why january is not the month to key off of. >> the road show gets a little more encouraging the longer you wait into the year. as far as you can tell, how many companies are in the process of getting ready to do this? >> well, there's what's already filed, which if you look at the deals filed within the last six months there's probably 70 or 80 of those but there's probably another, you know, 70 or 80 that

are in the process of getting filed in the next couple months that will start to see emerge into the spring time and the summer, so the unfiled pipe line is at least as large and maybe a lot larger than what's already out there. >> any doubt in your mind that social networking will be the biggest dynamic that pushes this along and are the facebooks and linked ins going to be the stars of the show? >> well, they'll certainly capture the most media attention, no doubt, because of the consumer usage and familiarity but a bunch of us from signal hill were out on the west coast last week talking to venture firms and prospective issuers and i've got to tell you it is much, much broader than just social networking. while those companies are probably doing very well in terms of users, they're pretty guarded about their business models so we don't know quite how big some of them are. there is a whole other set of companies in the internet space and the software space that appear to be poised to come out that are fairly large companies

in terms of revenues and earnings. >> is the motivation for the ipo venture capitalist invested in the companies need tog get some liquidity at this point? they've been on the sidelines the last two years and just want their cash back? >> well, clearly, that's part of it. there hasn't been much opportunity to get liquidity in the last couple of years and as someone reported yesterday, you're also getting from the ten-year performance numbers in the venture world, you're starting to drop off those last quarters of the bubble period, so the numbers are taking a bit of a dive and i think showing some returns and results will be very helpful and timely for that community. but it's also a branding event for these companies. being a public company and getting through what has become a very high bar really matters in the world where they do business. >> but to some extent there's pent up demand by venture capitalists and the question is once we blow through the first quarter or the first hundred ipos it could be that that's

just going to slow down for a while. what do you think? >> well, i think there is quite a large backlog of very solid companies out there, so i sort of see it spacing itself over the course of the year. there are a number of companies we talked to last week that really do want to get further into the year, demonstrate good 2010 over 2009 growth and start to be able to show investors what 2011 will look like. so i think everyone is in their own situation. it's not really a flood or a rush to the door by any stretch of the imagination. >> p.e. firms too probably want to do some stuff, right? >> absolutely, joe. there are a number of private equity firms and in their cases more of a leverage. >> more of a backlog there, those guys. they may have to manage some of these companies at some point right? god forbid they have to look at the operations of what they bought without flipping it, right? >> there is also an opportunity to deleverage with ipo proceeds as opposed to just take some cash out for themselves. >> dividends. >> and finally, david, between

facebook and twitter you think facebook would come to market first? >> i think that would make the most sense. they have an enormous user community and twitter while it has really come on strongly i just don't sense it's quite as large a company and really there's no reason to rush these companies out before they're absolutely ready. >> yeah. >> i think the backers will really want to make sure these launches are very successful. >> we'll see what happens. ipo of twitter or joe actually twittering. that would be -- >> i would bet on the ipo first. >> be a good bet. i am not a twit and will not tweet. >> thank you, david. >> thank you, guys. >> thank you. countdown to the opening bell on wall street is coming up next after a break. u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock,

while you trade around the globe. fidelity investments. turn here.

our guest host today steven rosenberg one of the top leaders who owns graystone bank, overall, in terms of worry about credit markets, how would you characterize your level of worry? >> i tell you, i don't really have a level of worry. we're seeing lots of securities coming back. we see -- we have a large portfolio of government guaranteed student loans, prices have increased 4% to 5% over the last few months. we're seeing a lot of investors coming back into the market.

ginnie mae securities trading at a premieum we haven't seen in a long time. we have a pretty optimistic move. >> you think it's too tenuous for the fed to move? >> i think so. there is too much downside that if things move the other way they'll be blamed for pushing interest rates. >> having to revils it the medicine. good to have you. thanks for your time. >> great to be here. >> make sure you join us tomorrow. "squawk on the street" is coming up next. live from the financial capital of the world, this is "squawk on the street." good morning, everybody. i'm mark haines. >> and i'm erin burnett. jobs, the adp report shows that the private sector lost about 22,000 jobs in the month of january, mark. >> there is good and bad news in that report. it could give us hints as to what we'll see friday in the mother of all jobs reports.

steve liesman is breaking it down in four minutes. >> where's the countdown clock? four minutes to steve. >> four minutes to liesman. >> and now, in our other top story, comcast, i don't know that this would have been our top story a year ago but darn it, it is now, mark. the nation's number one cable operator did way better than expected knocking it out of the park, one trulystupendous company. >> run by very handsome people. >> handsome. >> david faber has more on the company that may soon be our parent and nice work, mr. roberts. you are a handsome man. >> yes. he pulls off glasses like nobody can. president obama meantime saying this morning the issue of bonuses at bailed out aig will end in march. >> "the washington post" reporting the company will pay out another $100 million in nu