we have sort of the same dynamic here. california and greece. it's not that different. >> who is going to prop up us? i don't know. china, i guess they own everything at this point. it gets dicey, but we'll see. i liked "the who" at the top of the hour. >> they're playing sunday. >> right. >> i think there's a new channel on xm/siris. have you been listening? >> i have listened. they acquired the long tracks, the -- the deep tracks. >> they took that channel and made it a who channel. >> we can say this because we're on the -- >> yeah, but i will not help -- he said don't help us because you're out of oef our demo. >> yeah. he said we don't want younger people to know that you're listening to it. of course, the picture could change quickly this morning and we'll see with that jobs report that is coming.

just because the claims number was bad doesn't mean that this number is necessarily going the be bad, but it does cap the paul on it. the polled economists expected to be unchanged. remember, we had a big -- we had a little bit of a gain in november and then a horrific december. we'll see what happens. this is sort of the bumper or the rubber match. >> yesterday, i think consensus was 15, then it was 5. most of the data this week has not been that great. claims, adp, challenger. >> yeah. and also the unemployment rate is going to apparently, i guess, be unchanged or maybe tick higher to 10.1% where average hourly earnings are forecast to rise 0.2%. here is some of the good things that are happening as a result of this. and that is, i mean, the dollar looked a little better. >> have you heard that? >> what i like to see is that we're still above 10,000. if we could hammer oil and get that to where it's cheap for

consumers and get gold to a reasonable level -- >> that's the weird thing, why gold, even with all the sovereign debt concerns has been trading into the dollar. >> well, it's great. and people say that they're getting out of risky assets. i thought you went into gold. that shows you that it is now an asset class that garners attention when other things are moving and can be bubble lishus, essentially. and oil, same thing. so if we can get this commodity boom, which may or may not be supply and demand oriented, get that under control with the dow much higher than 6,000 where it is now, that's the bright side. >> you know, one of the good things is that the on this day, last year, the dow was 25.7% lower. so we've come a long way. >> wouldn't it be nice to stay on the downside and have oil back at 40. >> that would be nice. >> but we can't do it. heretofore, it has meant a decent economy. >> we did talk about equities at

the top. risk aversion, obviously, the play of the day. as joe said, the dollar hitting a seven-month high against a basket of currencies overnight. traders pointing to this widening in the euro zone. government bond spreads as evidence about the fear of the weaker economies in that region. the euro is falling to its weakest level against the dollar since last may. we were talking about $1.40 just a moment ago. this morning, it's below 1.37. the swiss national bank was seen selling its domestic currency in asian trade. that's a rare play. they said it would continue to prevent any excessive rise in the franc as long as they were deflationary risks. so the euro is taking it o chin everywhere. >> and for that 70% move we've seen in equities, the possibility of a 10% correction has been present the entire time, right? where are we, about 7% right now? >> yeah. >> so you can -- rosenburg is

watching, the other rosenberg, david, saying hmmm. rubin na is rachg this. he's like, am i going to be right? all of these people have been saying, el-erian, that there's a new normal and that the stock market doesn't reflect what's happening in the real world economy. they're starting to think, am i going to be right? >> there is a moment of truth approaching. >> yeah. but anybody who was complacent thinking, this is going to be easy. we're going to go higher. but who is going to be right, the people saying it's gone way too far? by the time we get to 10%, we're scared to death. >> 10% -- >> of a correction. we're at 7% now. if we do another 300 points or 400 points, people are going to be like -- >> we're talking to jim paulson later today. his point is wouldn't it be poetic is after all these sovereign debt concerns that was the moment we really started adding jobs and all these people

who got out missed what may be a rise in the market because of impending job growth? >> the question, really, is this the end of the last financial crisis or could this result in a new one that's ahead of it, a buy-in, the mayan end of the world crisis. >> in front of the end of the world. >> you are short. good. thank you. who is going to cover? oil prices this morning, as you would expect, are -- that's a risk trade, as well. it's only down 26 cents, but it's at $72 now. several traders say the drop was in part linked to a hedge fund that was quickly unloading a big oil position. although as we know, there are no speculators in oil. prices are still about 50% lower than the record aboveed 147 in july. if we talk about oil, we should talk about treasuries and gold. >> treasuries, the two-year is

yielding maybe 80 basis points. >> i'll keep it in the mattress. >> yeah. there's the ten year come down from the 3.6% level to 3.575%. we already mentioned gold, but you would think in an era where people are worried about paper assets -- >> you're a day away from the three digits, theoretically. >> it could be, right? >> it can move that much. not to say that it will, but we're not at $1,300 any more. >> no. that's a three-month low on the february contract for gold. >> it would have been harder for me the way things were. maybe christine tan can shed some light. she's in singapore. first, though, to zurich where carolin schober has the latest. this is your fault, carolin, whether it's your markets or your countries that are out of money. this is -- we're hanging this on you.

>> oh, yeah, and here in switzerland, the swiss national bank probably intervening again. but let's take a look at the european markets. we're continuing yesterday's losses. many of them are now trading at two-month lows here. the ftse, cac and the dax down mixed set of results here. of course, the worries about the sovereign debt and spain and portugal and greece, but also today, traders seem to be nerve was about the jobs report from your side of the pond later today. let's take a quick check off the euro, switserland, now at 1.4688. it was as highs as 1.4905 in overnight trading. the swiss national bank is supposed to or believed to have intervened in the markets again. it usually doesn't do that in overnight markets, but we did only get a no comment from swiss national banks here. volvo is up at 2.4% in sweden,

despite the fact that they posted an operating loss for the fourth quarter. however, cash flow for that about it business was very strong and they gave us a cautiously optimistic outlook for 2010. let me very quickly mention syngenta. that stock is trading slightly higher. the company surprised investors with a sizable share buyback giving us a cautiously optimistic outlook for 2010. with twhab let me send it over to christine in singapore. >> hey, carol ddin. sovereign debt problems in the euro zone spooking investors, rising jobless claims ahead of nonfarm payrolls data today. commodities down sharply on worries that the global economic recovery could be derailed. in tokyo, the nikkei fell 279% to a two-year low.

honda may recall some 2,000 prius vehicles from the u.s. and japan because of brake problems. but shares in toyota managed to rise after it raised its annual outlook today. debt problems in europe shook sendment to dump tech stocks. hong kong dropped 2.3%, lowest in five months. hsbc falling sharply and over in australia, the market lost 2.3%, a three-month low. sliding, metal and commodity prices hitting the miners hard. a bleak picture here in asia. and joe, depending on what the number is, if it's a bad number, it could be all your fault how asian markets do on monday. >> maybe so. but it's hard for us to add jobs as all, your, your economy and others are so weak. i'm not buying that. let me just say one thing. you are the tail and we -- at

least concede that, you are the tail and we are the dog, okay? >> we are wagging. >> all right. that could have gotten dicey. >> you know what i meant. >> yeah. >> thank you, christine and carolin. >> lakshman is with us and david joy joining us this morning. guys, good morning. >> morning. >> you've been coming in, lak, maybe longer pointing to leading indicators saying the market is going to go higher because the markets were pointing higher. now you have this turn, which i'll give you in just a s.e.c. here which shows maybe an inflexion point in that story? >> yeah. basically in that chart you have three lines. the bottom line is the economy. it's the indicators, not a forecast. it's production in employment and sales coming up. it's growing. the middle line is the market. and you see the bounce off the march lows up to the january

highs, which is a 70% move and now we're giving some back. the top line is the interesting one. this is the long leading index. it has a stronger lead over the business cycle than equities, which are a short leading indicator. and in recent months, the growth rate has been pulling back, pointing to slower growth in the economy starting sometime, say, by mid year. and i think that in that context, which you see the market as it is now, it's clearly less -- you know, it's more of a one-way trade. it's more of a risk in 2010. as opposed to market cycles in 2009, the economy itself, the recovery is very much intact. there's no double dip eminent. >> but the fact that the long leading indicators are softening -- >> yeah, that's big news. >> and not in a good way. >> well wibt depends. if you're the economy, it's okay because it's norm kral.

if you're betting stock prices are going to keep rising the way they did last year, you're going to be challenged. >> david, is that what you saw from yesterday? is the market simply getting what it's been forecasting for all these months, finally that story is finishing up? >> yes, i agree with the chart completely. i think what the market is doing is adjusting to a new phase of this expansion. the first, you know, real reflation aspect of this is now unwinding. you see it as a result of china tightening monetary policy. other central banks around the periphery of the world have done the same thing. what we're doing now is adjusting to a different phase which represents growth. it makes the recovery likely to last longer, so this is a healthy adjustment, in my

opinion. >> in terms of the market, if we're down almost 7, where does that end in this correction we're in? >> i think this could go down between 10% and 15%, so on the s&p, 1030 is down 10. if we don't hold that support, we could easily go to 970, 980, somewhere in that range. if we do, i think we'll represent a very attractive buying review point. >> lak, someone said the move now, given europe, is swrr where we were between bear and lehman. nobody really understands the broad implication. that means it's going to take an amazing jobs number today to change the mood, wouldn't you say? >> yeah. because even on slightly good economic data, earnings come out okay. people aren't that excited about it. you can see that in the market. clearly, they're worried about things like europe. europe is having a softer recovery than anywhere. joe was mentioning, we're still the dog.

we absolutely are. >> big dog. >> big dog. 12 percentage points increase in gdp in under a year. and so when uveng about the world, china doesn't buy more than the u.s. globally. the u.s. still buys mow more from europe and from most other countries than china, except for china and its immediate trading partners. and you see the trading partners of china are taking it on the chin right now. >> david, you're still buying tech? >> yes. i think cisco's guidance is absolutely right on. i think business is on the leading edge of a renewal cycle, reinvestment in technology that's going persist three to five years. i think we've come off a period of roughly ten years of underinvestment. so this is the leading edge. it will not be because of, you know, hiring people back.

i think cisco has got it right. >> but we're going to get jobs growth. and i want to say something here. this is a stronger recovery than the last two recoveries in terms of gdp and in terms of job growth. >>. >> how do you know? this has something to do with the unemployment rate, which may have peaked or will peak by mid year. that will be a lot faster than it peaked coming out of the last recovery. if we get positive jobs growth, that will be three times quicker than coming out of the last recession. so even though this hurt -- i did say yes, though. and i was trying to think, why would anyone hire -- after what we've seen recently, it's like, now i'm worried. >> that would be the biggest surprise. it's the good numbers.

>> would that not be a big surprise? >> the reason they hire is because they're scared, because they have more demand than they can deal with. you don't hire because you get a tax credit. >> it's not enough money. >> you're afraid you're going to lose market share if you can't keep up with product, right? >> exactly. when apple's numbers came out and they had their sales volume went up by about a third, who is buying that? that's not a rich wall street guy. >> people say that's just the inventory. >> it's always the inventory down. >> but the deeper something is, usually you would think the snapback would be more significant. >> and it will say already is. it's like jumping into a pool, you hit the bottom, you're coming up really fast, but everybody is a little scared before you crack the surface. that's where we are right now. >> carl identifies with meta fors like that. >> i wouldn't be scared coming out of the water, but -- >> well, you worry about

trinkets normally. >> we're going to wrap that up. >> you d -- this guy is in studio today. can you get a shot of that? that is beautiful. did you look at that? >> that's a gorgeous coat. >> really. you're usually not into -- are you always like this? >> no. i dressed up for you guys. >> so you knew you were coming in studio today? >> yeah. >> look at the ways these lines match almost. >> you call me a metro sexual? >> only as a person in the same club. >> anyway, david, thank you. >> thank you for coming in. >> i'm transfixed. i don't even think that -- look at the chart. coming up, what do gas prices have to do with the super bowl? more than you might think. the surprising connection, next. national car rental? that's my choice.

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welcome back opinion it's going to be an exciting weekend of weather in the northeast. hey, alex.

>> you said it, it's going to be nasty, indeed. we're talking about a lot of rain across the south and the wintry weather pressing up through portions of the mid-atlantic. it's coming down in punches, for sure. because of that, we have winter storm warnings anywhere shaded in the white. winter storm warnings from d.c., baltimore, through philadelphia, even portions of the jersey coast. blizzard warnings up. so watch out for that as we get in towards the early weekends. we have a bit of an upper level system tracking its way on through. our main system is still far south, sliding its way through portions of the deep south. that is oshg working its way off towards the north and east causing us major headaches. as we slide northward and get into some of that colder air, we can see it changing to snow here in northern portions of north carolina and into virginia. that's where we're going to be talking about some of the issues this morning. then snow showers across portions of the midwest. of course, we want to know how

much is this going to be inspect through the midwest, we're talking about 1 to 3 inches. then we start to pick up more as we slide farther east. look at d.c., totals, 1 to 2 feet. so get those shovels ready. a lot of folks are going to need them. >> alex wallace, wow. one to two feet. are you ready? >> yeah. up here, i thought it was washington. >> that's what i'm saying. >> yeah, yeah, what about here? >> alex, do you want to regionalize that? >> manhattan, what do you think? actually, you might as well, summit, new jersey, what are you thinking? >> summit, new jersey? oh -- >> and i want within the inch. or not. we're going to get some snow. there are crickets. guys from the weather channel -- >> they have the whole country to worry about! >> they do. and they haven't watched "squawk box" to know that at any time i

was going to ask him who is the real morning joe. that would have gotten -- anyway, gasoline -- louder crickets. gasoline plunging nearly 5% yesterday on the heels after a market sell-off and this is not the closing bell. here with gas prices and what it means for the super bowl is steven shork. what are you hypothesizing here between gas prices and the super bowl? >> every january, we have a lot of fun in doing the comparison between the rise in inflation when it comes to the price of admin to the super bowl and gasoline prices to help put things into perspective. now, the viewers should consider after the first super bowl, the price of admin to the super bowl could buy you 31 gallons of gasoline in 1967.

today, the price of admission to the super bowl, face value, probably backside 900, yet nets you nearly 400 gallons of gasoline. i want to keep that into perspective. in 1966, the consumer's dollar, 14 cents out of that went towards energy. today, only 3 cents on the dollar goes towards energy. energy was a greater component of household expenditures, yet prices were more expensive then than they are today. now, if you look at what we see this week with the earnings, chevron/exxon could not make money in the fourth quarter turning $70 oil and making a profit out of it. those two companies lost, on frg a, around $7 million a day combined in the fourth quarter on the refinery operations. because even though gasoline is cheaper today than it was 40 years ago, demand is obviously weaker. so this begs the question, the

two largest oil companies can't make money at $70, why the heck is oil at this point still above $70 today? >> and why? i wouldn't know. you would know. >> this is an absolute speculative driven rally, joe. >> even at 70? >> even at 70. why? because the fundamentals do not justify it. why? because the oil companies can't make money. there is only one guy out there who buys oil. the gold market, the corn market, lots of people buy those for lots of different reasons. there is only one reason to buy crude oil. that is to turn it into a refined product. if you can't make any money, and you can't because in the fourth quarter, european and american closed 1.7 million barrels a day of refining capacity. that's .7 million a day of crude oil demand that was destroyed in the fourth quarter and yet prices moved higher in the

fourth kwarer. it was not all big i'll driving prices higher. it was our guys who belong to the marion cricket club all driving the price higher. and yet the end product did not rise. this is a bubble and it will pop, joe. >> oh, you know, i feel like i'm going to start singing like a choir. so when you were saying that there's only one group of people that buy oil and that is people that turn it into gasoline, you're making the point that that is the use for it. but there are other people, and you just named them, that the reason it is at 70 is not because of the people buying it to turn it into gasoline. there are other people that they will eventually have to come to terms with true supply and demand. >> absolutely, joe. look, unless the stan witch club in connecticut are going to start buying tank farms to store this oil -- because earlier in the year, it was 135 million barrels owned. you have to make them take

delivery in cushion, oklahoma. do you know what the capacity there is? it's maybe 40 million barrels. so you have speculators that own three times as much oil in the paper market than you can even store out in the central hub of this company. therefore, again, remember, gasoline prices aren't moving higher. so the bottom line is, the oil companies cannot pass the cost of $70 oil on to the consumer. something that's to give and something will give, joe. one of though things has to happen. either oil prices have to go and drop below $60 at some point this year or gasoline and diesel prices will have to rise significantly. now, mind you, the oil companies are doing what they can because if you look at all of the statements following their lousy earnings reports on the down shoot, they're all announcing significant layoffs in the refining sector. they're closing down refineries. i.e., they are ar tacking the supply curb because the demand curb is not working for them at

this moment. >> steven, excellent, thank you. we appreciate it. >> thanks, guys. >> and we'll check back with you. what do you think of that, are you still long? >> crude? >> yeah. >> no. >> oh, you covered with me. >> yeah. >> where, at $149? >> yeah, something like that. i won the bet. that's all i know. you wouldn't let me cover when it was my time to win. >> so you're out now, you think it's coming down. >> i think so, yeah, unless the economy improves, in which case it's going up. >> maybe the economy is not that bad. but oil was not where it should be in terms of driving demand. >> the demand there may be artificial. but it's still demand. >> but before, carl, we had to choose. the world is going to hell in hand basket and oil can come down or the world is recovering and oil has to be $150 a barrel. it could be that the world recovers and oil is at $50 a barrel. you would like that to happen.

>> yes. >> we'll work on that. >> i want to go back to the '60s. when we come back, we'll get some top stories this morning plus the futures pits. don't go away. >> plus -- the banker is calling. pick up the phone, howie mandell. the ceo is on the line and he wants to talk to the squawk team. we've got a deal. ♪

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welcome back. we are koujting down for the big jobs number in a couple hours time. polled economists expect that nonfarm payroll number to be unchanged. meantime, the unemployment rate is seen ticking higher. average hourly earnings forecast to rise 0.2%. i think the range on the estimate, joe, is minus 100 to plus 100. >> is it, really? >> yeah. so people literally have no idea. and yarn is one of the toughest to predict seasonally. you've got weather. >> and the standard deviation is a couple hundred thousand, too, right? so basically we could have that on. so it could be plus or minus 500,000. it's a trend. united states like a trading we get from nielson. they're not even in the ballpark half the time, right? >> but usually to the upside.

>> then they are accurate. now to the futures pits. cnbc contributor kevin ferry of cronus futures management. kevin, have you been busy the last couple of days? are you an expert now on -- >> good morning, joe. >> do you know all the currency in some of these countries? what is it in the ukraine, do you know? that's one of the s.tu.p.i.d. countries, right? spain, turkey, portugal and ireland? >> right. >> kevin, is anything on the money markets showing we're on the cusp of what we already went through or is this sort of the consequences of what we already went through? >> perfectly put. i think mr. schork was into the same thing in oil, applying to the whole ball of wax. so no, joe, the short answer that the indicators of crisis through the banking industry that were early two years ago and a year and a half ago, they were early indicators that

things were going wrong and have remained quite stable. they are still being botched by the central banks heavily, but that's a good thing. and i think that the key thing here is that you're really dealing with a market that is driven by liquidation of a massive theme that resolves around inflation. so this is what happens when myths burst and i think that's when mr. schork was pointing out in the oil market. even as you were pointing out with gold, gold is negatively impacted, even though fundamentally, you're talking about people losing their faith in the paper money system. so i think that, you know, when you look at the domestic economy, that the numbers are still improving. the key here is to not like this market reaction morph into a confidence crisis because those metrics that indicate real problems a year and a half to two years ago are still quite stable and quite low.

>> initially, they've got those countries that are much smaller on the global scale in the u.s., are you saying the big countries and you start worrying about them and then you go back out of the dollar into gold because you're afraid? >> well, again, it's denominated in dollars. and so people will have to balance that out. but this is a -- this trade has been a movement of gold in terms of euros. and that is hard for the american investor to get their hands around at any given time. >> but this is going to be contagious to our sovereign debt, or not? and the healthy country sovereign debt. we've all spent a lot of money propg up the financial system. >> there is no doubt that when you go through the dominos, that there are certain scenarios that are quite -- how else should you say? scary. but i would say that overall, you still see the most

flexibility and responsive economy right here. and it's not -- again, i think it's like you were saying, is $2.50 gas really worse than $3 gas for the american consumer? i just don't buy it. and so this creates a balancing, what you're seeing is the liquidation of an investment theme. and right now, there just isn't the vision. there's too much uncertainty to say what is the next theme? what are they going to rotate into? and that's why you see this type of violent action. but i would still say that the america stronger dollar is somewhere between the tallest midget and gulliver. >> with all we've done, you're still confident in policymakers, that we've handled this better than everybody else? >> absolutely. and i think they've gotten very little respect in the blogosphere for what they have

done. >> and kevin, things can only get better at 59/41? >> it shows the severity, but very little wag given at $1.50 what $1.50 on the euro is doing to the domestic economy over there. we were looking at it here. i would say they've taken a lot of the action out of the market in front of the number. i think that if you can come out stable to a little better after the unemployment report, then you probably have seen the worst of it. >> kevin, thank you. i had to explain that to carl. >> it's a good thing they did what they did when they could because it is going to be -- there's another fire. there's not a lot of water. >> they swoer in the guy. >> scott brown. >> right. so now the idea that we do anything totally insane, some of the other stuff that you've been pushing is less likely now at 59/41. >> yeah. it was already not likely in the senate. the house has been on fire. they've gotten a lot done, probably one of the more prolific congresses in recent

memory, wouldn't you say? >> you mean they've passed a lot of stuff on their side of things? yeah. >> not one thing has happened, but they've passed a lot of stuff. >> it shows you how hard it is to get things done. >> you want to end the physically buster. >> interesting. i saw yesterday the filibuster was originally created because of minority factions within the same party. >> i think we should outlaw it now until the republicans get back in. >> okay. fine. gotcha. our next guest, one of the first bank ceos to refuse t.a.r.p. money, dick evans joins us here on set. it's great to see you. >> thank you. >> you don't like this plan? >> well, i'm not sure it's going to make the difference. on main street, what we've

experienced is we've been out calling on customers. our calls are up 75%. we've got 63% more business relationships than we had, but our loans are down. and so what is happening is the business person is scared to death. it's about confidence in the future. and until we get confidence in the future out on main street and businesses, they're not going to buy another truck. they're not going to expand their business. and so it's not about banks not loaning money. it isn't for us. we've got over $1 billion sitting in our account at the fair. we've got strong capital. we don't have any t.a.r.p. and so i'd love to make more loans. the problem is is the business person is scared. >> are they mostly scared as far as you can tell about forthcoming regulation, taxes, or just their own order book? i mean, in what order is their concern holding them back?

>> i think it's everything. i think it's just an attitude and an environment that they just want to have some confidence that they know what is going to happen. >> you know, this constant, you know, whether it's health care or whether it's the financial industry and all the different things that we hear about, you know, as a businessman, they have had to -- they've seen their revenues come down. they've lowered inventory, so they're pretty much in line. they're going to go through this, but the real question that we all want to do is grow the business. i want to grow. all of us want to grow it and they want to grow. and you've got to have confidence. >> the overall, what the globe has been through in the past year would make anyone hesitant about the future. so -- and we don't know how many jobs we're going to get today. so it's been very difficult. would you say it's 50%, what we've been through and 50% what we might get through with this administration? i mean, is it -- >> you know, i think we're through a lot of it. >> so now we're worrying about what they might do to us, the

government? >> exactly. and, you know -- >> really? >> exactly. i think we're limited to a large extent off this feeding tube that's hooked up to the economy of the government stimulus and the fed. and we've got to pull that thing out and get on with our life. and really let the markets take place. >> so they told you to take t.a.r.p. and you said no? we did the analysis early and we found atit wasn't 5%, it was 11. number one, our capital was high. it was high enough then. it's higher now. we said thanks but no thanks. >> that's separate from all the restrictions that would have been imposed on you, right? >> yeah. in our 141 year history, it's going to be one of the better decisions. but obviously, we didn't know all the other stuff then. >> do you do any proprietary trading at all or do you just do what banks are supposed to do? we just take care of customers.

just good bread and butter. >> interesting. it's totally demand in terms of the loans not going out at this point. >> i really believe that. >> because bankers are -- you know, you're in the post office, pictures of all of you right now for not giving any money out to anybody. and you're saying it's because people just aren't -- >> it is demand. >> all right. >> it's great seeing you, dick. thanks for coming in. >> thanks for having me. >> coming up, a live report from the sight of this weekend's super bowl as we mark our favorite morning of the month. chaino, did he get there? >> probably. >> living in luxury, as we know that he is prone to do. anyway, jobs friday is today.

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when we come back, darrin rovell is reporting live from the site of this weekend's super bowl. darrin. >> reporter: yes, carl. plenty of chatter between the colts and the saints. but coming up this morning, we're going to be talking about ga ga gatorade's next big idea. we'll be talking to their chief economic officer coming up next.

super bowl xliv set to kick off in miami this weekend, that's where we find our darren rovell with a special guest. tell me, darren, it's someone from that swimsuit special that you did, the s. ic"si" one. >> reporter: you'll have to wait until next tuesday. >> what do you have today, then? >> reporter: right now we're at the super bowl. this is a very good guest, trust me on this one. super bowl, you think the sidelines and you think gatorade and exposure. joining me now is sara robo hagan, the chief marketing officer of gatorade. >> hi. >> reporter: i got to ask your first question on the "g." you came in and rebranded gatorade a little bit. was it without controversy? are you committed to keep the "g" instead of going back to the old gatorade? >> yeah. the reason we did it because we were focused on bringing back to our core roots. and we've had an amazing

response from the people we were focused on which was teen athletes and really the reason we were doing "g" this year to set us up to what's coming now, 2010, which is a big launch for us. >> reporter: the pepsico ceo was on cnbc earlier this week, she said that gatorade got a little bit away from the science of it all that made it such a powerful weapon. what happened? and how do you rein it in? >> i don't think we got away from the science, i think we realized it was a way to get into the science more and get into the athletes' needed. what we did was spent a lot of time talking from teen athletes to the elites, peyton mannen and and usain bolt. we could help them with nutrition and help them on the field during the game and then recover afterwards. >> reporter: you'll be

announcing in the pregame show, the new science, the new system, it will hit shelves in april. give us what you'll be presenting to the marketplace. >> it's called the "g" series and it's made of three products. first of all we have gatorade prime which is an energy booster that we give to the athlete before they go on the field just to get them going for the first 30 minutes. >> reporter: that's pregame. >> pregame, that's right. and then links up to gatorade perform which is our good old gatorade, always been the best rehydrator during the game and when they come off the field, we have gatorade recover, what this is, the first one that we've done it, a protein to help muscle recovery, it tastes good and it's refreshing, this one you come off the field and you want to refresh to help the muscles recover for the next day. >> reporter: i have to ask you about tiger. gatorade tiger was pulled back before of his issues. how would you describe his

ability to use tiger as an endorser going forward? >> we want to respect his privacy like everyone else and we want him to be able to get back to the game. >> reporter: carl, back to you? >> we'll get top stories when "squawk box" continues. and then -- ♪ it's the final countdown ♪ >> and the fed governor is starring as "squawk box's" guest host.

taking cover. investors seeking shelter after nearly a 3% drop in the dow. will this selloff continue? and what kind of message will today's jobs report send to investors? toyota's tailspin. woes for the automaker mount as its hybrid models come under scrutiny. we have the latest on the largest recall in u.s. history. and it's super bowl weekend with a big buzz around miami. >> this is our current unemployment rate in the country right now, what percent? >> what percent? >> 50. >> 38. >> 38. >> 38. >> lower. the second hour of "squawk box" begins right now. ♪

good morning, welcome back to "squawk box" here on cnbc. i'm joe kernen along with carl quintanilla, and becky for all of the people flooding us, will be back on monday. i thought i'd say that. that's nice, isn't it? people flooding us, when is becky coming back, they want her back and she'll be back on monday. >> she'll be back on monday. >> and we're out of here, both of us. >> not together. >> we're not going together. >> let's put the rumor to rest, carl. >> even if you had asked. >> not that we wouldn't take our families together perhaps and go somewhere, but the two of us are not going anywhere alone for -- >> i got more than enough time. great line-up this morning, including carl and i. carl and me. and much of it is on the big jobs report, that will be the focus. and that market selloff yesterday which got a little dicey there at one point, almost 300 points. we'll have a preview of the job reports ahead of the 8:30 eastern job release. we have the latest on the

toyota debacle. cnbc automotive reporter phil lebeau will join us in a bit. and then leading automotive website, edmunds.com, will tell us what the true market value of your toyota will be when it's all said and done. apparently, the streets of san francisco, not the actual tv show, empty. they're all priuses. everybody in san francisco has a prius and they're all -- all -- yeah. tumbleweeds going by, an occasionally rice hif-a-roni ca car. i think if you live in san francisco, you had to have a prius. >> it's a serious issue, you're making light of san francisco and their priuses. >> yeah. i take it back. we'll also check out what is in roche's pipeline, the quarterly results and the company's outlook with the industry straight ahead. becky is here, look.

>> oh, okay. maybe not. first, though, a look at the top headlines and it's still me. greco? >> yeah. >> stocks taking their biggest tumble in months with the s&p coming off its worst day since last april, joining us is jim paulson, chief investment strategist for wells capital management and greco, we need you to, head of merrill global research. it's vasair scary in these comp portugal and greece, the question is, how much does it unravel? carl eluded it was bear stearns before lehman, do you think that's the case? are there more shoes to drop? >> joe, i was thinking that things have gone downhill ever since the vikings lost the nfc championship game. i think we clearly took the wrong team to the super bowl. but beyond that, i -- i -- i -- you know, i think we got to remember we got a heightened sensitivity in this country, and really in the globe right now, to crisis, nipg thanything that

like it, walks like it, we have a visceral attitude, we're doing that here. as i look at it here, there's not the indicators in the united states marketplace that would normally show a contagion going global, you know, libor spreads have hardly moved. credit default wspreads or mortgage junk spreads are fairly benign. we haven't had a huge flight of quality from the ten-year treshl treasury, i think that's a very good sign. i think we also have, you know, there's a number of countries in the -- in the european community that have the wherewithal to stop this thing or backstop it, and i think they're going to. i think they have too much skin in the game not to, and i think it's unlikely that they'll let this thing, you know, blow out. and then, lastly, i think it's important to remember that unlike when bear stearns came, the momentum in the economic cycle right now is positive.

it's clearly positive globally, and also here in the united states. and i think that helps the idea of a crisis mightily if we have, you know, accelerating growth throughout the world, it sort of helps keep any kind of mini crisis from going global or going to a full contagion. i think all those things probably make this more a correction than a full-blown, you know, another round of crisis. but, you know, certainly it's -- it's scary, no doubt about it. >> all right. before we get to david, we were just talking about the streets of san francisco, the empty streets right now. the ceo of toyota out -- >> make can -- >> apologizing. >> a heartfelt apology. this is the head of the company saying he's going to announce prius measures. as soon as they are decided, what else? a couple other headlines here. deeply regrets causing the worries to the customers. they set up a global quality

improvement task force. they will take steps in the u.s. and europe as soon as they are president. the executive president said president toyoda will head the quality improvement committee, and then it's a global quality control committee, so we'll see what it means for the company but it looks like they're trying to get out of ahead of it at this late date. >> getting out ahead of it will be behind it. anyway, it's david bianco, how are you? >> good. good morning, carl. good morning, joe. >> you heard a lot of the things jim was just saying. what do you think? >> yes. i very much agree with jim, and it's good to hear from him on a day like today. i do think he's right, investors are unnotified and ervunnerved, equity market will offer the best entry point since march of last year at that time of level,

because just as jim said, we believe the ecb, the eu, are going to act to backstop the sovereign risk concerns of the southern european countries and we really don't see it as an issue that's spreading worldwide. the u.s. economy is showing signs of improving, and earnings at the s&p are looking quite good. fourth-quarter earnings look to come in at about $70 annualized and, i think you'll get 5% to 10% growth from that level in 2010. >> most of the fears have been subsided, either in china or sovereign debt, but then there is the nagging unemployment levels in this country and whether the recovery is -- is really occurring or not. there are people that say, you know, we're kind of just bouncing along the bottom. you don't -- you don't think that? >> yeah, well that's a lot of the same old concerns as the market has appreciated quite strongly, and we're not ignoring those things, but we would argue the economy is improving.

we expect to see a positive jobs report with an unchanged unemployment rate. the manufacturing is good, exports are good. these are important things for the s&p and the foreign businesses of the s&p are looking quite good and the operating leverage at the companies means that as the top line does grow, and it has been growing on the sequential basis, there's going to be a lot of bottom-line -- bottom-line leverage and growth. >> hey, jim, david brought up a point about entry points. any entry points since $6.66, you've been buying higher than the day before are the only entry points you've gotten. maybe thises could create that. is it already there, or do you sit back and wait for a while? >> i don't know. i think it could certainly -- it could certainly go somewhat lower, joe. but i think -- i agree with david that over the next year or 18 months, if investors focus on this, i think we're early in this recovery, both in the economy and in the stock market. you know, i -- you bring up an

interesting thing on the job creation, because i think this is another step in this market cycle. right now the debate, as you say, joe, is still could we still have a double dip? is this a sustainable recovery? i think we're going to have the first positive job-creation quarter in over two years, this quarter. and with that, i think we put to bed the debate on wall street whether it's sustainable or not, and the debate moves from sustainability to how fast will the recovery be. and as you move that debate forward, i think that's worth another leg up in valuation of stocks. and so i think there's risk on the table both ways today for investors. maybe this current cycle selloff goes a little lower, but you also, if you're not in this market today, you risk missing out another leg up if we -- if we have positive job creation this quarter. >> i see that -- i like that, though. you need a couple extra months. you're not going to see positive job creation in january, so you're giving yourself the

quarter, you're giving yourself time to be positive, because that would be a tough call of the day. the three fades of the bull it starts with a bounce back from levels that shouldn't have been there in the first place that people don't believe. >> yeah. >> maybe it was the 60% or 70%. then you need a level where people finally start believing and realize you're in recovery. maybe that's where we are. and then you get to the irrational exuberant part, and then you say we're at the point that people aren't really sure they believe there's a recovery and that could -- >> i think -- >> yeah, go ahead. >> i think so, joe, i think that's still the debate out there. and from the bull investor, it's a good thing that we're still debating that and we've climbed as far as we have. because, to me, once we settle that, and once we agree on wall street that we're in a sustainable recovery, i think that's for a fair nother move higher and we haven't had it yet. i think there's risk on both sides of this.

if you want to get out because of this potential contagion, you risk as much being in if the contagion goes further. >> david, what are your final comments before we go? >> i'm known for being direct, so i think this will provide a good entry point. we do believe the s&p will appreciate to 1275 by the end of 2010 and i believe we could be at 1200 in the first half of this year, probably in the spring, as the contagion fears out of southern europe fade away. so i'm encouraging investors to act on the nonfinancials right now, and it's investors' instincts to kick the tires when we hit these concerns, but this is something that will be somewhat beneficial to the u.s. banks as policymakers around the world, both fed and ecb, will be very accommodative for a long time. >> thank you, gentlemen. are you okay? or you don't like everyone on the same side? >> i'm a little -- i'm a little -- i would ask jim about the feeding tube from the

government that we're all on. i would ask him where would we be now or where would gdp be had we not had that? and i think you two agree that we'll not get a refill on the feeding tube, right >> we don't need them anymore, right, paul? >> the other thing i would point out, carl, people have a big concern about the government-created recovery. and yet i can't think of any postwar recovery that we've ever had that wasn't government created. every postwar recovery starts with government policy juice, whether it is money supply, lower rates, steeper curve, more deficit spending. that's the way it always works and then they start to take it away and the economy is self-sustaining and they take it off. i don't know why everyone thinks this one will be different than past. that suddenly if we pull away the stimulus it will die again, because it's never really happened in the past. i agree the magnitude of the stimulus is pretty remarkable, but the fact that it's a

government-created recovery is no different than almost any recovery i can think of. >> garrison keilar. i thought you were going to ask him about favre. >> powder milk biscuits. >> you need a little garrison keilar music or something when he's talking. >> sound effects? >> st. clair. >> yeah, you betcha. >> it sounds good when he's -- >> thank you, gentlemen. >> thanks. the january jobs number is about 90 minutes away and here to discuss that and more is this morning's guest host, former fed governor larry meyer. special guest treat. nice to see you. >> nice to be here. >> along with steve liesman who has been waiting for the jobs report for more than a month or so. >> more than a month, actually. >> the word going this is that january is always tough, right? always tough to guess because of seasonality factors and weather and census. >> there's 3 million jobs being lost, so if you lose the 3 million exactly, you end up at zero, right?

then the ceaseasonally adjusted number would be zero. january is more normal in the weather. a lot of the data going this is positive. the claims-on-claims per month is better. the jobs plentiful has gone up a little bit. adp was okay, so, the numbers are good, but there's a lot of stuff out there, do you know what,s at "journal" said this morning, take it with a grain of salt. >> how about uyou, larry? what's your take? >> i think we're on the cusp of positive jobs growth. we need 120,000 normally just to keep the unemployment rate constant and as we get into recovery, as people come back into the labor force, we need something like 150,000 just to keep the unemployment rate constant, so we're far away from that. and, therefore, the unemployment rate is likely to continue to edge up. on a month-to-month basis, who

knows. >> larry, we have a chart showing what's happened to the labor force. you saw, like, last month, 660,000 people left the labor force. ian sheppardson, writing this morning, if those people in the past several months had not left the labors to, the unemployment rate would easily be 11%. something the market should prepare for today the unemployment rate could shoot up if those people are not leaving the workforce. i'd also point out that william dunkleburg who does the nhib survey says they are still losing jobs. the survey he sends me in advance of it. it will still show -- it's basically flat in terms of the numbers of workers they're losing, but it's still a net loss for small business. there's a nightmare going on over there when it comes to small businesses, but large businesses have stabilized and increasing their jobs. >> after the productivity numbers yesterday, does that make you feel they're doing fine with the number of workers they have and they can ride that wave? or that can't last forever and they're going to at least have

to buy more capital equipment or finally bring on some more people? >> so, the productivity numbers continue to be amazing. and what it tells us is that firms are still showing caution. in terms of hiring. output rebounds. since they slashed the workforce so aggressively during the downturn it's our expectation actually that employment will start to grow much more rapidly as, hey, we've got a lot of people out there, as firms rebuild their workforce to be consistent with -- with that. >> over what period of time? is that a first-half story? >> i think it's a story over the next two years. it takes some time. >> bill dudley was quoted yesterday as saying that the fed could continue mortgage-backed security purchases. my take on what he said is that is no change at all in policy. the fed said it will end it, but never say never if the situation should really change for the -- for the worse.

and my understanding is that the federal reserve is not all that concerned right now with what's going to happen to mortgage rates when they end their purchase at the end of this quarter. i don't know -- larry's picking up on that. but my take they see the adjustment in the mortgage market going on pace really. >> i think, first of all, there's no doubt they'll end the purchases at the end of march. that's a given. and the question is whether they are ready or not. and i think the expectation -- and it's spreading in the markets -- is the impact will be very small. if the markets are surprised they end it in march, well, they deserve to get -- >> eight months. >> you take out ads in the paper, hey, this is going to end? >> here's the question for the federal reserve. is it the stock of mortgages they put aside that affects the market or is it the flow of mortgages they take off the market every week? i think at this point they are convinced it's the stock. they are tapering down to it, and there's really been very little effect in the mortgage

market, so they think the mortgages on the side is what did it. bill gross trimmed what happened. he's saying 50 to 100 and now he's saying 30 to 40 basis points. i talked to a guy in the mortgage market, he think it will be zero, no effect of the fed getting out. >> 90-some-odd percent? >> huge percentage. the private market will have to come in. the fed is watching it very carefully and they will come back in if things get out of whack, but what is out of whack, 50 basis points or 100 basis points would be out of whack. >> did you see bernanke's swearing-in? >> i didn't.he president wasn't? >> how do you talk about transparency when you have a private swearing-in ceremony in apparently there is no legal standing for the swearing-in ceremony, because he was approved while he was still

chairman. if the chairmanship expired, there would need to be a -- >> why would you need to see someone sworn in? you think he's actually going to swear? >> typically a president or a top official at some time -- >> but transparency, though. >> the most public fight over a fed chairman. >> the ceremonyial way. >> it's not a legal thing. >> you want him to answer questions that you pose him, you don't want to see the ceremony of someone swearing in, how did he look, what was his expression? was he worried? >> does it help he was in matter? >> i don't think it matters. >> this isn't what transparency was watched. i want to have watched it. i wouldn't have taken time out of my day to watch it. >> it shows you what a nerd you are. >> i don't want to be surprised at 2:15 there was a 2:00 swearing-in ceremony of a fed chairman. >> i would have liked to see scott brown's swearing-in. >> it was on television.

>> cheering in the streets. we have comments and questions, e-mail us, squawk@cnbc.com. toyota is providing an update apologizing for their recall problems, and joe said they'll ask outsiders to judge the quality control. huge embarrassment to the company. this is a live picture of the press conference going on in japan right now. a lot more on that going on after the break. the dollar is the star of the global markets. we got euro, dollar at a nine-month high -- or nine-month low. about -- under $1.37. be right back. 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,

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this is the latest on toyota. akio toyoda apologizing this morning about the worries about the recall worldwide. and the company providing an update on the pedal fix in the u.s. cnbc's phil lebeau is in parkridge, illinois, at a toyota dealership with the latest. good morning. >> reporter: good morning. akio toyoda, the ceo, talk iingo reporters in japan. he was asked a few minutes ago what he would say to american customers about both of these issues, and here's what he had to say --

>> toyota's car is safety, but we try to increase the product better. so, our -- our -- this kind of procedure is good for the customers. so, please believe me. we always customer first is first priority. >> reporter: akio toyoda a few minutes ago saying the customer should be the first priority for toyota. this coming as dealerships across the company prepare for the big fix, including at this dealership here outside of chicago. for many dealers it's going to be a little easier for them to do the big fix of repairing millions of faulty gas pedals because they are getting payments of up of $75,000 from toyota. the money is designed to help ease the financial burden of recall and fix. toyota has approximately 1,200 u.s. dealers, and those dealers are noticing that their showrooms are a little quieter since all of this has begun

about a week and a half ago. toyota is also considering a major marketing effort to win back customers' confidence. toyota estimates it has lost 20,000 sales due to the recall and the sales stoppage of eight popular models. toyota believes the recall could wind up costing the company about $2 billion, and i said earlier, dealers are noticing it's slower business. >> the showrooms have been a little quieter over the last couple of weeks. i know toyota had a drop of sales in january. i can certainly understand some reluctance here in february. i know that about 60% of my ground stock is on stop-sell right now and that certainly has hit sales. >> reporter: and that's similar to what we've heard from other dealers around the country. toyota says it has no plans to suspend sales of the prius, but, again, akio toyoda, the chairman and ceo, talking with reporters over in japan this morning. guys, it is clear that toyota is dealing with two things here, one, not only figuring out

exactly what's wrong with the cars and fixing them, but, two, trying to repair its reputation, both in japan and here in the united states. >> yeah, all right, phil. that's -- normally will take a little bit of time i imagine. we'll check back with you. you'll be reporting on this all day long. did you ever consider how long we've been making cars, i mean, the human race, for 100 years or something? did you think we had the accelerators and the brakes figured out? >> well, the brakes are a new fe none no phenomenon, the hybrid brakes. >> you have a mercedes that if it hits something, it will put on its own. all these things, we can't figure out an accelerator, haven't we done anything? i would work on that and make sure you had the accelerator working. i thought the model-t had a decent accelerator. >> it's still unclear to me if

it's a design issue or a production issue. >> it is? >> if it were a design issue, i think they'd have it all moved out. >> gps, the cars are amazing. the thing is sticking on the floor mat on some of these. anyway, coming up, we're counting down to the jobs report, plus much more of what to expect from the markets as we head to the weekend. as we go to break, take a look at the biggest losers and give a little plug for one of our shows.

stocks coming off their biggest one-day losses in months as jobless claims rose and all the debt concerns about europe mounted. tom lee is jpmorgan's u.s. investment strategist to walk us through what will be another eventful session. good morning. >> good morning. >> as far as you can tell, is this about europe? and if so, how much is panic and how much is legitimate? >> well, carl, you know, i think without question investors are reassessing their appetite for risk right now. we had some evidence of inflationary pressures out of emerging markets and now we're having some of the sovereign debt issues raised in europe, and it's coming at a time when the u.s. debate still is how strong and how decent quality is

this recovery going to be. so, i think there's real risk assessments being taken. but, as you know, markets tend to overshoot initially. i think these are transitory more than secular how it affects the stock market. >> a lot of people are trying to argue this is the end of the liquidity-driven phase of the recovery. it's like sailing across the cape, right? across cape horn, right? the water is choppy and you don't know what the weather like -- is going to be when you cross into the other ocean. >> in fact, without question. at the start of any recovery, you know, the outcome and the slope and the duration are certainly un -- you know, we just have no visibility initially. but i think, first of all, you have to remember, a lot of right things are actually happening in the u.s. economy. first of all, you know, we have really good ism readings, consumers are obviously doing a lot of spending and there's hints of corporate discretionary loosening up and in terms of

financial markets' liquidity, we've had negative equity flows from the retail investor, so the retail investor is still a source of untapped liquidity. all of this comes as the equity markets, if it can sustain a move below 20 on the vix. >> we had windows where the vix was low and now it's getting choppy again. >> yeah. >> where do you think -- let's say this correction continues. where does the blue-light special light go on? when are things really on sale? >> well, you know -- as you know, when corrections start, you can never tell how deep they're going to be. only until you see evidence of capitulation or as you say, such huge bargains, that the blue-light special comes on. we may be getting to that point. yesterday we had the first 90% down day, it's the first day in 12 days of the correction that we've had a real sense of panic selling. and i think in terms of valuation, a metric that i think is very helpful at turning

points is the equity-free cash-flow yield of stocks versus bond yield. and last week the ratio was 39%, it was 40% in march of '09. we're getting to levels where the equity-free cash flow yields are cheap continue to credit. >> interesting. it points to an earnings season that has not been a disappointment, right, for most metrics, it's gone underappreciated, perhaps, essential with things like tech, it's been good? >> that's right. it's -- what i've been finding the last couple weeks earnings haven't been on the forefront of investors and p/es isn't been. if you take the s&p 500, 18% of the companies reported so far are reporting all-time high in revenues, and if you take the russell 2000 which is a better measure of the u.s. economy, 32% had better revenue growth, and 22% are reporting all-hetime

highs. >> you'll argue to be cautious and nimble over the short term, the next week or two? >> right now we're at a sort of point where being contrarian can be very dangerous. but given our view that we're -- we're really facing a much more durable recovery, especially one with consumer spending being stronger than expected, you know, this is a time to be a slow buyer of equities and i think confidence will come really in the next couple of weeks as we get better data points. but obviously a lot hinges on today's labor. >> we're not far away from that. tom, always good to talk to you. when we come back, the ceo of roche sits down with our pharmaceutical reporter mike huckman about what's in the pipeline for the drugmaker. and the jobs number only an hour away as "squawk box" continues. as we head to the break, here's a look at the widely held stocks. "squawk box" returns after this. national car rental knows i'm picky.

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sales of the world's most widely used cancer drug,

avastin, jumped 21% last year, but that was not enough apparently to satisfy investors in the swiss drug giant roche, the stock has been down since the company reported results. that's pretty telling, that's the sign of a weak market. cnbc's pharmaceuticals reporter and author of the pharma's market widely read blog, his name is mike huckman and he's in new york and it's another "squawk" exclusive. good morning, mike. >> good morning, joe. when he sat down with roche, they wanted to buy the remainder of genentech, and at the time they called the $86 a share offer very, very fair. of course, the deal ended up getting done for 95 bucks a share, so with that, good morning, mr. schwan, thanks for joining us this morning. it's nice to see you. so, let's start with genentech. how challenging has the integration been, to absorb this

california-style big biotech into a very traditional european big pharmaceutical company? >> i'm very pleased with the progress we have made over the last year. in fact, we have completed the integration in a record time by the end of last year. and i'm very happy that with only a few exception, all the top people of genentech remains with the company. just recently we made a survey that genentech employees, and the results we got back were really outstanding. over 90% of the employees are committed to the merged company, over 90% of the people are committed to stay with the company long term. >> speaking of m & a, what can you tell us about reports that have surfaced this week that your crosstown switzerland rival, novartis, may sell the 33% of the voting shares that it owns in your company worth around 9 billion bucks u.s. to

help finance its proposed acquisition of alcon? >> this is pure market rumors and i wouldn't comment on market rumors. it's pure speculation. >> but if that speculation were to become reality, do you think it would put an end to the ongoing speculation that novartis and roche would some day do a megamerger? >> again, pure market rumors, i wouldn't comment on that. >> if health care reform gets put back on the front burner in washington, d.c., what impact could it potentially have on your business? especially because your drugs, those in oncology in particular, are among the most expensive drugs on the market, and they are very easy, very popular political punching bags? >> right. it is very difficult to predict how the health care reform will finally shape out. personally, i'm convinced that over the long term, not only in the u.s., but around the globe,

pricing pressure will increase. but at the same time, we remain committed to contribute to a broader access to health care for american citizens. and then we will see our -- we will see what the net effect will be for the industry. but it's difficult to predict how the reform will actually shape out. >> and, mr. schwann, we'll why on the topic of drug pricing, a new study came out, the much less expensive cancer drug, avastin, works just as well as lucentis, at treating the most common cause of adult-onset blindness? why not just repackage avastin in the tiny injectable doses for the eye and save the health care system untold millions, probably billions of dollars? >> well, the study you refer to, it's very important to note that the authors themself speak about the flaws of this study. this study is very limited from

a scientific point of view. it is not retrospective. it is not blinded. and, very importantly, it doesn't look at the inflammatory response of avastin versus lucneti. we have developed it specific for the eyes. and avastin is used for colorectal disease. >> but they are using avastin for the eyes, so why not just make it easier for them to do it? >> because lucentis is the superior product? when you look at the study, it's interesting to see that 23% of the patients that have been on the avastin arm withdrew from the study due to side effects, whereas only 3% of the patients who were on the lucentis arm, withdrew from the study. so that is an indication that lucentsi, is the superior drug.

>> thank you for joining us exclusively on cnbc. check out the blog pharmasmarket.com. you can follow me on twitter on mhukman. >> and thank you for that. a lot of people do. when we come back, toyota talking about the gas pedal recall. and we have an industry analysts to talk about how big a hit toyota will take when all is said and done. with fidelity, you can take your trading around the world, because now you can trade 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.

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akio toyoda apologizing to consumers for worries because of the recalls. toyota has taken a hit since the recall worries began. the question now is when, and if, it can recover. joining us to talk about that with the insight for consumers is the industry analyst for edmunds.com. it's good to see you, john. good morning. >> good morning. >> i guess this press conference they're doing is finally an attempt to at least confront the issue they've been dealt, right? >> absolutely. the prior press releases that have come out from the company

have been quite contradictory and i don't think they talked about procedures to take care of existing customers and when they would be going back online to sell cars. >> where is the consumer who would otherwise be in the market for toyota? are they still looking at them? are they still visiting those dealers? are they going straight to honda and others? >> on edmunds.com we see consumers like you might follow a stock. we can see the press release come and what purchasers are doing. we look at purchase intent, behaviors they are exhibiting, they are very close to going a dealership. and consideration, more of a shopping, what vehicles are they considering in the shopping processed. toyota, needless to say, took a nasty hit initially when they went offline. but as far as the shopping process, people that aren't ready to pull the trigger just yet, they've actually held relatively steady? >> in terms of intent. >> they took a little bit of hit because the cars aren't available for sale. as far as consideration, somebody that might be looking 90 days out, they've held relatively steady.

>> why would that be? >> my contention is people were considering buying camry or considering buying a corolla and might be visiting the areas of the site strictly from a reference standpoint, let's compare this, i need to buy something else. >> right. how bad is it for the prius, "the times" pointed out, a lot of the cars they had, they poured a lot of ingenuit that car? it's hard to see the issue hit the model, right? >> we'll see how it's affecting toyota with that. toyota tends to be the benchmark when you are looking at a hybrid vehicle. we'll see what consumers will do very quickly. >> do you think they'll be able to resolve the issue? >> it tends to be a drive-by wear. and it's a software issue. we'll get more clarity from toyota. every factory has episodes of recalls, but this has turned into a miniseries. >> yeah, toyota's has gone on and on and on.

why is it that honda and hyundai are set to capital i'd? >> we're seeing ford and gm doing actually pretty well. if you look at the big models that toyota is not selling, the camry, we see the chevy malibu and the ford fusion getting a good amount of that trend, and as far as the -- the rav4, we see the chevy equinox getting that up front, so they're doing okay. and they're aggressively going after the toyota models by offering discounts and incentives as far as financing goes also. >> do you think if toyota comes back with aggressive lease deals or incentives, is it enough to win back customers who are terrified by what they read in the newspaper? >> i think you hit the biggest issue. when the smoke clears in all of this and if toyota in the pre-owned market takes a nasty hit, will toyota be able to offer the aggressi ivive deals

customers are used to getting, how are they going to be offer the aggressive lease deals? >> how would you compare this to the recalls over the last 20, 30 years? >> there's some similarity. there's a tail with this. it goes to what built toyota up, the quality and the reliability. we don't know just yet, but that is probably the main thing that it goes directly to the core of their business. and these cars account to 10% of total u.s. auto sales, so this is real big. >> john, thanks for the insight. >> thank you. when we come back, the countdown to the jobs numbers continues. also up next, ahead of the super bowl this weekend, an annual tradition returns. darren rovell goes to miami and tests the players about their market knowledge. we'll find out how much these guys know about some of the biggest stories affecting the economy and the global markets when we come right back.

preparations are in full swing down in miami, that's where the super bowl will be on sunday and this has become a cnbc tradition. darren rovell once again asking the tough questions to some of the game's participants. did you know the answer to all these questions, too, darren? i'd like to ask you, give you a cnbc quiz, too, but you'll join us live from miami now. >> reporter: yeah, not, not -- maybe not all the answers, but listen, we want to know how much these guys read besides the sport section. we want to know how much they watch besides espn.

the answer -- not much. who is this guy? >> i don't know. gorbachev. >> reporter: who is this man? >> i want to say ben bernanke. >> reporter: who is this guy? >> looks like a crook. >> reporter: he looks like a crook? >> yeah. >> reporter: why? >> he just got that look about him, man, about to take everything you own. >> reporter: who is this man? >> dr. phil. >> i think it's raj -- >> reporter: raj rajasa? >> yeah. >> reporter: who is this man? >> what country is dubai in? >> i know it's in an expensive area, i know that. i don't know. it's over there. >> reporter: over there? >> across the way. >> say it slowly.

united arab emirates. >> reporter: how much is $1,000 worth of gold worth? >> $1,000 worth of gold? $1,000. >> reporter: $1,000 worth of gold is probably worth $1,000, right? >> no, more than that. >> reporter: $1,000 of gold is worth more than $1,000 of gold? >> gold is up right now. >> reporter: what is the interest rate in the country right now, what%? >> 50. >> 38. >> 38. >> 38. >> reporter: lower. >> 28. >> reporter: lower. >> 18? 8? >> reporter: higher. >> 11. >> reporter: lower. >> 10. >> reporter: yes. >> wow. what everybody crying about? >> reporter: well, listen, they weren't all hard questions. i did say how many companies are in the s&p 500. one of the answers i got was 32. which was very specific. so, you know, but i do this every year. it's fun.

it's enjoyable. they don't know anything. >> i don't think -- >> reporter: back to you. >> those guys do read, i mean, whether they mean to or not, they do absorb some of this stuff, but i can't tell you darren how many laughs you were getting throughout the crew here on set. that was good stuff. >> reporter: the gold question was a trick question, too. how much is $1,000. >> i rifled through that quickly. how much is $1,000 worth of gold worth. >> reporter: it's a trick. >> where are the survivors if the plane crashes on the border of something. >> reporter: but that guy did know. he said $1,100 an ounce, that's why he had the confusion, he was so close to $1,000, so i gave him that. >> we have anchors from other business networks saying there are literally thousands of stocks in the s&p 500 we have this woman saying. >> we have a former fed governor listening to him saying the fed locks you up. that was good. >> reporter: it was good.

>> darren, looking forward to a great weekend, i'm sure. we'll talk to you later. darren rovell in miami. lucky. it's going to be a good game. >> absolutely. it was funny. those guys were funny. they are great. when we come back, the final countdown to the jobs number, we'll get the instant reaction from our panel of experts, and pimco's ceo and founder, bill gross, as "squawk box" comes back on this friday.

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♪ the super bowl of the economy, the jobs report. it's 30 minutes to kickoff, and the team is set. zan zandi, meyer, liesman, santelli, pierson. the big game for the markets. >> no one, and i mean no one, comes into our house, pushes us around. >> the touchdown. >> it's a reverse. >> he's got it, touchdown. >> the play of the day.

it all comes down to this -- >> on this team we tear ourselves and everyone else around us to pieces. >> are you ready for some data? >> now, what are you going to do? >> "squawk box" begins right now. ♪ good friday morning. welcome back to "squawk" on cnbc, first in business worldwide, i'm, alocarl quintanilla, along with joe kernen. and akio toyoda apologized for the recalls worldwide and deeply regrets causing problems for customers. he expressed a message to

consumers in english. here's what he said -- >> believe me, toyota's car is safety. and -- but we're try to increase the product better. so our -- our -- this kind of procedure is good for the customers. so, please believe me. we always customer first is first priority. >> the grandson of the company's founder has faced criticism for being largely invisible during the crisis. the company announcing u.s. dealers have begun fixing accelerator pedals on recalled vehicles. mailing notification letters will begin today. traders in europe and asia reacting to the selloff yesterday. the major european indices hitting two-month lows. adding to the problems, the euro zone's debt ratio. and the nikkei dropped 2%.

and the equity, we're off of the session lows. we were down to 60 points for a value earlier on, now more like 40. the dow dipping below 10,000 before ending above the psychological important level. and i think of the past 14 sessions, joe, nine have been triple digits. >> absolutely. crazy. we do have larry meyer, former fed governor, before we get to the panel with the jobs report, we had a guy on, strategist, that said as we get more positive data points with the economy that maybe the market responds to that. the market, down yesterday on worries about the claims number and some of the sovereign debt, but also that december jobs report was awful. off camera we were talking about what the gdp report will likely be, because it was five seven. you think it could go to where? >> we think it could go to 7%. >> on the fourth quarter on revision. >> when they look over the data,

they have missing months for the report. they have to fill them in. if the data comes in strong, they are more likely to be conservative in filling in the missing months, therefore there's a bias going forward when the preliminary report comes out, it will be revised up. >> outliers get more outlying. the meyer's law. >> i always wanted to have a law named after me. >> not named after you. >> oscar mayer. >> i had to name it after me, the only problem. >> what's the first quarter and what's the full year going to for this year would you tell me? >> going to slow down in -- obviously slow down this year and in the first quarter, but we're very bullish in the economy, because we think growth will be 4% this year. >> 4%, wow. >> the unemployment is headed higher and it will be elevated for a while, and we don't get back to full employment until

2014. >> and if you can guarantee me those numbers i would posit probably that the market doesn't correct that much more. i mean, if you had those type of data points to look forward, 7% in the fourth quarter and 3% or 4% in the first quarter and 4% in the first year then some of the wochryes might be laid to rest that this isn't a real recession. >> is that a best case? >> it's certainly not a best case. you got to remember that there's a regularity that following a recession as deep as we've had, you get a very strong rebound, about 9% would be in line with historical regularity. so, this is not a strong everi r recovery, it's a weak recovery. not as weak as some people think, but 2% would be a real disaster. okay, the unemployment rate would be going up very sharply. there's no room really for additional fiscal stimulus. the fed has done as much as it can do, that's a real disaster story, that's a story where

we're heading towards deflation. >> wow. all right, now let's bring in our other panelists and really i hate to hesitate -- cnbc all-stars, but i will say mark zandi, and bob barbary. we still have bob meyer. >> larry meyer. >> i was looking at steve liesman. >> i want to throw down what tracken said the other day. did you hear that? >> no. i missed it. >> when i said you were looking for ten eight by november. he said we'll be well below ten. and he said zandi doesn't know what he's talking about. >> he's my buddy. >> he won't be your buddy for long. are you still in that camp? because it matters for a lot of political reasons, too, where we are. you think we'll eventually head up to 11% still? >> yeah. i think if policymakers don't do

anything else, then by election day we'll be between 10.5% and 11%. i'm not as optimistic as larry, i heard his gdp, i'm not that optimistic, but the labor force is declining, it's declining by 1% year over year until december. you have to go back to the middle of the korean war to find something like that, if the labor force was flat or not growing, we'd already be at 11%. it's hard not to see how the unemployment won't rise. >> we'll have you both on in tight, we weren't able to do it today. >> joe is a lot bigger than i am. i need a weapon. >> maybe you can get liesman, if you can touch him, he can come in. >> and bring your models. >> by the way, my models, you know, i use the models to take a stab at the payroll employment number. they are all pointing negative. i don't get a positive number. >> i hate when you say that.

because you're right so many times. >> the only thing there's so many technical crosscurrents in this month, january. you have seasonals and benchmark revisions and all kinds of things, so it could be. but the numbers suggest another negative number. the data suggests another negative number. >> bob, 4% for this year? you probably think -- >> i'm at 4% as well. i think the point that where i think larry and mark agree on is that the unemployment rate is capped at not just the rate of growth but what happens to peace rate. i don't have a model for the participation rate. it fell phenomenally i don't know what it will do, but i think we'll get 4% and good job growth. i don't know what it means for the unemployment rate, as i said last time, if we get good job growth i think the administration will switch tactics and be talking about job growth and not the unemployment rate, because you had that extra risk of what happens to the people who left the workforce. >> someone will be talking about the unemployment rate. >> obviously. >> yeah. >> if you're running against

them, you're talking about the unemployment rate. but for my clients worried about the stock market, if you get good growth and you have good profit growth, then this is a correction, not the onset of a bear market. and a correction always calls into question the sustainability of the recovery. you know, it's 5% and 7% and 7% and 10%, it doesn't matter. no, when you're in it you decide that the recovery's not going to hold up. larry talked about the meyer's law, i like to say the revisions are in the direction of the deflection. >> and the law. >> and it rhymes. >> jesse jackson, it's good, i like that. >> and already in terms of the data we've gotten since the 5.7% gdp has has been revised up, we'll be on a 6.2% on the inv inventory and the construction data. a strong fourth quarter. retailers better than expected. wholesalers on your show

yesterday, some enthusiasm, dow, cisco, so companies are saying it's better and the data is better. i think it's a correction, not the onset -- >> when will we get -- probably according to mark won't get a positive data point today, then. when do you think we start feeling better? >> i think one of the next three numbers -- >> one of the next three? >> one of the next three will be 150 and by the next spring we'll be seeing 200. >> canada today, 45, that's three times the estimate. >> 45,000? >> yes. >> do you have that many people up there? >> oh, man, we have viewers up there. i can tell you that much, we have important viewers that we love. they come down here for health care, but they are important to us up there. >> i think we'll have to start thinking about the rising unemployment rate is an extra boat. if you look at the numbers, 361,000 people left the work force last month. if not for that, we'd easily be close to 11% at this point. we have to get used to i think the market is going to have to learn to digest positive

payrolls and rising unemployment at the same time. and what that means. i think it will have to see it hopefully in the context of the -- there's the labor force numbers, you can see that. the other number there was, what, 130,000 back in november we lost? people just dropping out. they are going to come back. there will not be jobs for these people. the unemployment rate will rise and could rise fairly strongly. that's where i think zandi is right there. i think his models are prettier than prakan's models. >> can't be prettier. >> you know, once in a while they can be more accurate, but believe me, they can't be prettier. >> i'll start using the meyer's law. we'll come back with all of you gentlemen as soon as the numbers break. i gems uess we got to take a br. >> we do. when we come back, we'll go to a toyota dealership and get a firsthand look at how they are handling the recall. and we'll look at the buzz on washington and talk about wall street on this jobs friday when we "squawk" continues. >> space out?

>> yeah, i just stare at my desk, but it looks like i'm working. i do that for probably another hour after lunch, too. i have to say, in a given week, i probably only do about 15 minutes of real, actual work.

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welcome back. major developments in the toyota story out of japan today. cnbc's phil lebeau is in parkridge, illinois, at a toyota dealership this morning with the latest. good morning, again, phil. >> reporter: good morning, joe. you know, ever since the first major recall came from toyota and the second one and now the prius brake issue, everyone has been saying the same thing, where is the ceo, akio toyoda? we haven't heard from him. well, look at the scene today in japan. a major news conference called by toyota. akio toyoda walks into a room filled with reporters and essentially says we goofed up, we apologize what happened with the prius as well as with the gas pedal. he held the press conference this morning apologizing for the worldwide recall. he also says he regrets causing worries for customers. here's a little more of what he had to say this morning --

>> believe me, toyota's car is safety, and -- but we're try to increase product better. so, our -- our -- this kind of procedure is good for the customers, so please believe me. we always customer first is first priority. >> reporter: so, what does akio toyoda's apology actually mean? he says they'll be cooperating fully with the u.s. investigations and the congressional hearings next week. they'll be asking outsider to check the quality of the vehicles and the company, they're also setting up a global quality control committee. this comes as toyota dealerships across the country begin the big fix. and dealerships have been r receiving payments up to $75,000, to deal with the financial cost of doing the recall fix. toyota has approximately 1,200 u.s. dealers who need this money

as business has slowed down. >> toyota is allocating a certain amount of money per dealer based on how big the dealership is, which would reflect the number of customers that they have. the idea behind that cash is for the dealer to do whatever he or she thinks best benefits the customer. >> reporter: and for many dealers, that means paying their mechanics overtime. they're going to have the bays open longer hours, some will be open 24/7 as people start to bring in the cars. the recall notices were sent out today, but we're seeing reports around the country bringing in their vehicles and having the shims put in their vehicles. it is will take weeks if not months to have the fixes done. back to you. >> thank you, phil. meantime, treasuries secretaries old and new took the worst the hill could dish while the president embarked on the podium tour after delivering his

$3.7 trillion budget. joining us, david gregory, moderator of "meet the press." good morning. >> good morning. >> scott brown had the swearing-in and the president will live or die by the jobs numbers and i wonder how you think he'll play, today's result we'll get it, if it's good or bad. >> i think if there's any modicum of progress, he'll talk about it. he'll talk about it in terms of the stimulus. he'll talk about it in terms of a gradual change. but he's got to be realistic about what is unacceptable about the jobs picture and about the state of the economy. what is a bigger question mark i think is how he addresses the prospect of any double-dip recession or just the fact that even if there's economic recovery, the businesses are going to be slow to expand and start hiring again. that's going to be more difficult from a policy point of view and that's why you have a jobs bill that talks about tax

breaks and any incentive you can think of to get companies hiring again. but the facts are what the facts are and the president has to make the case in terms of a political record of what they staved off and how they're focused on creating jobs now, knowing that the government has a -- frankly a limited role to play in moving that jobs numbers. >> right. and one thing we've been talking about at the table this morning is why and how the unemployment rate, the rate itself, is so politically potent, if there's job growth over the next three to six months, republicans will be able to point to a higher rate if, in fact, more people do start looking for work, right? >> absolutely. and raises the issue, too, alan greenspan will be on the program on sunday, has said on "meet the press" previously, that if you get some progress toward getting people back to work, the difficulty of that is that people who are on the sidelines, who are not counted in that number, then may re-enter that force of people looking for jobs and then it can swell again. so, that's certainly a question i have. does it go up before it goes

down? a lot of economists, as you well know, think it could go down from double digits as we get a little farther into this year. >> meantime, the toyota news continues to swirl around. what do you make about conspiracy theories that the government somehow went out of their way to embarrass the company, knowing our interest in seeing u.s. companies do well? >> they are obviously aware of it in the administration and they're sensitive about it. you had secretary lahood of transportation, recalibrating his own words when he told toyota drivers to stop driving their cars and he to clarify their remarks. it may have just been ham-handedness, but if you look at the view of who wins or loses in this equation, there will inevitably be the theories. >> scott brown, swearing in a little earlier than we thought, right? it was going to be the 11th -- instead, are we now in the business of ushering people into the senate, or public office, sooner than we think? >> he watches getting so in was

taking his time in boston, and he demanded to be seated earlier, he wanted to get into it. so, they accommodated him. it will be interesting to see the chart he tos nfollows now. let's not forget he's a massachusetts senator and it will be difficult to cling to a conservative agenda with that base of political support, but he's known around the capitol as 41. we'll see whether, one, he can represent some new spirit of bipartisanship, because we certainly know that he represents some real challenges to the obama agenda. >> right. finally we got the tea party nation convention going in to his second day. governor palin will be speaking this weekend. i love some of these -- these things on the schedule. >> yeah. >> one thing is -- let's see. from the author of "green hell, how environmentalists plan to control your life and what you can do to stop them." there's some breakout sessions, the five easy fixes to the high cost of mass immigration and how

to do voter registration and where to find conservative votes. do you think this will turn into anything substantial, do you think? >> i think it is already substantial. if you look at our own polling, the tea party movement has a net positive rating as opposed to republicans and democrats. there's such disaffection and frustration with washington that if you have a movement that's based on conservative principles and real frustration about a mounting debt andting completel control, then you have a real challenge for republicans and democrats alike. haley barber who is head of the governors association, he wants to let the tea party know that they are on their side. look at the divide within the party. you have a scott brown winning and a bob mcconnell in virginia, centrists republicans, there's a purity test that has to be gone through in the republican party until they figure out where they're going to be, if they can

get back in to power starting in november. >> in addition to greenspan, what else? >> greenspan and paulson coming on together to talk about where we are and where we're headed with the economy and john brennan as well with so much concern about al qaeda, another terror attack, the handling of this christmas day bomber and he'll start off the program with our focus on terror. >> we'll see you sunday, gregory, thanks very much, david gregory. >> this could be a big moment on sunday, as david talks about, the big jobs report. we're counting down the minutes for that for january. we'll have the instant reaction from the bond king, bill gross, and he'll be our special guest host when the data is released in about seven minutes. before we head to break, check out the price of crude.

well, day after the biggest drubbing the dow has taken since last april, losing 268, we are off the lows of the session. still below fair value by about 20 points or so. awaiting the jobs number. we are live at the labor department. the super bowl of the economy is on the way, the january jobs number. the previews are done, and now it's down to business. we'll get the numbers from january after this quick break. ñ

big question for today will be whether or not this jobs number we'll get in a few seconds is going to outweigh the flight to quality trade that we've seen for the past 24 hours. our team is back, though, mark

zandi of moody's economy, and former fed governor, larry meyer and bob baarbera, the chief economist of itg, and steve santelli and steve liesman. talking about the crosswinds that will be flying across this number, the seasonality of january, the census workers that are going to start to get hired. some of the retail action that happens during the holidays. cnbc's hampton pearson joins us now from the labor department with the numbers for january. hampton? >> reporter: minus 29,000. the nonfarm labor fell by 20,000. the unemployment is 9.7%, average hourly earnings increased 2.0%. construction, minus 75,000, transportation, minus 19,000. job gains, temporary help, 52,000 up. retail trade up 44,000. november and december revisions,

a net 5,000 additional jobs lost. the number of unemployed persons, 14.8 million, those out of work six months or longer increased now stands at 6.3 million. discouraged, over 1 million up from 734,000. we also had significant annual revisions from the bls in both the employment survey and the household survey. the real headline here? annual benchmark revisions now show 8.4 million jobs lost since the start of the recession, the previous number was pegged at 7.2 million. included in that number, an additional -- a 1.36 million december, 2009, benchmark revision losses, the unemployment rate, big headline there, quite a decline due to the changes, the benchmark changes and the labor force numbers. but additional people did find work. how significant overall are the benchmark revisions? well, normally overall between

march and december it's 0.7% downward. over the last decade the revisions half averaging 0.3% so, again, significant downward revisions, a much worse overall job picture over the last year than previously thought. >> hampton, thank you for that. hampton pearson. zandi, barbera, liesman, santelli. walk us through the reaction first. >> reporter: first of all, i didn't quite hear all of the revisions, but i was particularly paying attention to the april '08 to march '09 and it sounded like hampton said from 7.2% to 8.4% and that's relative to expectation. people are scratching their head about 9.7%, what people want to know is how much did the labor force shrink because they think that might be the culprit but we'll have to look. the response in the marketplace, which should be somewhat objective, interest rates are a couple of basis points lower,

not higher, than before the number. and we see that the equity markets are definitely, you know, a little worse off. it's hard to decipher. i'm sure that the headline news by many would be the drop in the unemployment rate. >> all right. steve, you want to walk us through what you see as interesting? >> yeah, i don't have the thing rick was looking for right yet. i will get that shortly, though. the workweek was higher. 33.3 hours. manufacturing hours were higher. overtime hours were higher. and then you had a nice rise in earnings per hour which is interesting. and i just wonder if this is just a case of working the people you have more rather than bringing on new people and, of course, paying them a bit more. that should help out on income. i'm looking at temporary up again, 52,000. construction more than estimated by adp at minus 75,000. i made a joke about canada before, that was a real joke, but this one about being any more construction jobs to lose was beyond me. it was minus 75,000.

manufacturing, though, did eke out a gain on net of 11,000. and the reason that's interesting is because the ism manufacturing survey has pointed to positive job growth in manufacturing overall for several months now and the payroll report hadn't caught up with it. it finally did. you also had a rise in service providing. government still down, minus 8,000. i'm going to have to dig into that. at some point, i believe it's february and especially march, when those census workers start showing up, but they haven't really shown up. my guess is what you'll see is federal, flat. and state and local, continuing to lose jobs. that shouldn't be a net. i'm trying to figure out if you had manufacturing up and service both positive, where the actual negatives came from, but i'll get back to that in a second. >> you want to take a crack at the unemployment rate, larry? >> first of all, it's not unusual when we get conflicting information. unemployment going one direction and employment going in the other direction. secondly, can we have a round of applause for adp, next time,

steve -- >> you were up by 2,000, right? >> the next time joel is in, identify ho i hope you'll give him exceptional range. the unemployment rate is way out of expectations, it would be very, very significant if we were already on a downward path, it seems totally implausible, because payroll employment growth is still negative. it will take a while to get back. and the unemployment rate will probably rise further and we'll have to dig into this data and figure out -- remember, unemployment rate comes from a completely different survey than payroll employment. >> the dow futures now above fair value which is weird. it happened in the last five minutes after rick said it got worse and now actually it's a little bit better. the revisions are hideous. >> the labor force is down by 249,000 and the employed down. >> it's much worse than we thought. up more in november than we thought. >> that can't be right. >> it can't be right? >> zandi?

mark? >> well, i hesitate -- i'm a bit confused by it all. i have to digest it. >> well, cracken has it right, mark. you're lost. >> i have to catch up. >> sorry about that, yeah. >> remember, guys, it's 111,000. mark, real quick, 111,000 increase in the labor force with the employed going up by 541,000 in the survey. the household survey and the payroll survey has been at odds. >> as i remember, mark, you made the point most of the time we've been on together, that it is the household survey that you think is the key one and the household employment is the key one. the up 141,000 is the one you're excited about, yes? >> that's right, bob. the household survey generally leads the payroll survey coming out of recession, so that would be positive and reverses the big decline last month. but let me give you sort of a benchmark for understanding the relationship between jobs and unemployment which i think is important.

to stabilize the rate of unemployment in normal times, most times, we need to create 100,000 to 125,000 payroll jobs. we lost 20,000 payroll jobs. so, i don't think we're close yet to even a stable rate at this point. >> but if we keep growing household jobs at a 540,000 clip, we'll make progress, yes? >> if we create 540,000 per month, but, you know, bob, it's very unlikely if payrolls are still falling. >> as i remember, the distinction was the household survey captures small business which the payrolls don't and it's the better report. i seem to remember you saying that. >> let me just add that unemployed fell 430,000 in this report. so, that's another positive inside the household report there. and the total private loss, by the way, was only 12,000. it was another 8,000 -- >> which included 75,000 in construction. >> in construction. >> i was at my dad's house in mid-january, and it was snowing, and he lives in miami.

and so i think you could say, seasonally we actually had a winter when the seasonal adjusted factors aren't looking for them, so i think the construction date ta wa was infd by the weather. i'm happy. >> adp had shown strength in services, right? i think the first back-to-back growth since the end of '07. is services going to lead us out of this, larry? >> i don't know. i'm really at the macro side, so i don't really care whether it's services or goods industry. >> on the services, larry, in the period from november through april, 2008-2009, you actually had 2.3 millions before the revisions lost, so it was panic firing associated with the credit crunch. isn't it reasonable to say if the economy turns out to be okay, that that firing wasn't productivity related in the sense that you got cleverer, it was panic related, we can get some of the jobs back? >> absolutely.

i think what we saw during the recession is firms were much more aggressive, much quicker to shed workers, and that's why productivity was so good during the recession. and that's our view, that -- that that's going to reverse now, and firms are going to increase employment more than you would otherwise expect from the -- from the growth in output. >> hey, mark, aggregate hours up 0.3% during january, what does that do to your gdp forecast in the first quarter? >> it was better than expected, i think it was a good number. we're tracking around 3%, 3.5% right now based on this and other data. >> we'll do a revision over 6% for the prior quarter and somewhere around 3% -- >> i'm not sure i'm quite comfortable based on this number. >> it's consistent with the 0.3% and the incomes numbers are a little bit better. >> and the retailer numbers are better than -- the analysts before the retail numbers came out were speaking of numbers

substantially softer than the numbers we just got. >> let me remind you we have the missing link, and that's the lack of hiring. we have yet to see any hiring. look at continuing claims and initial claims, until we get the hiring, until we get real, positive, substantive job growth, extracting from the census hiring, it's hard to conclude this is a self-sustaining economy, wouldn't you agree? >> no, i wouldn't agree. if you look at the data, right, the bottom for hiring was in june of last year. we've had some uptick in hiring and the number on the household survey and excludeing the construction data was positive. i think these are good numbers. and let's not forget, we're not coming out of a quarter where real gdp was 1.8, and we're looking at real gdp being 6 and change and now we're seeing -- >> it was just inventory. it was an inventory swing. businesses don't hire on inventory. >> i think you're seeing the same thing. i agree with mark, the american

people will not agree the recovery is real in the absence of job growth. >> that's absolutely true. and the fact of the matter is with the unemployment rate likely to be elevated for such a long time, the kind of angst out there and dissatisfaction and discomfort is going to last for a very long time. >> guys, thanks. appreciate that. fascinating numbers, bob, rick, steve, mark, appreciate it. more job report. let's get to bill gross joining us from newport beach, the pimco founder and ceo. good to see you. mohammed messed with me the other day, we talked about whether employment was a lagging indicator and he wanted me to make the leap to some of the things you talked about where employment can be a leading indicator because it can mean a new normal if things are like this for a while and it can actually affect policy decisions. do you think we're still in that position? because larry things we'll do 4% this year, larry meyer. what are your thoughts? >> well, the 4% growth in the first quarter or two is probably

a reasonable expectation, joe. but, you know, the unemployment is a -- is a long-term structural problem. i think that's what mohammed was speaking to. and that's going to be the problem of the new normal. i mean, what i heard in the last five or ten minutes in terms of discussion, not to mean economists, but it's like arguing the number of jobs on a head of a pin. you know, you talk about the payroll, you talk about the household. what's really happened is, as mark zandi pointed out, 8.5 million jobs of lost over the past two years and getting those jobs back is going to be very difficult. 35% were in construction, real estate, realtors, mortgage bankers and brokers, the subprime originators, you know, they were in retail, they're in state and local. those jobs aren't coming back and to posit a vibrant, private economy based upon job destruction that we've experienced, i think, is extreme. >> yeah, and, bill, what percentage -- let me ask larry, what percentage of those who are out of work are not on temporary

layoffs? meaning, the lack of an explosive wave of rehiring? >> well, there's no question that the proportion of people who have been laid off and not expect to come back to the same firm is very high. that's -- that's the case that this may be structural in nature. but i would ask bill, if -- if the economy grew 6% to 7% in the fourth quarter and you find 4% reasonable for the first half, you must have a return to good -- good job growth. at least through that point. and you must be saying, which could be very reasonable, that there's a handoff that doesn't work very well, and that after some of the temporary forces dissipa dissipate, that the economy's going to slow down significantly? >> yes. now, we are seeing that, bob. in fact, from 30,000 feet, here's our view -- that the economy and, in fact, the asset markets, which is really what the program's about, have been reflated by the wallet and the checkbooks of government, not the private balance sheet, bust the

government balance sheet. we're talking about zero percent interest rate and $2 billion plus in quantity taitative easi and it's being withdrawn and the sustainability of stronger governments is questioned. so, the private handoff is really in doubt as the government wallet and the will is being questioned by private markets. >> right. >> so, the key issue here, as i think we would agree, is what happens to private, final demand, and that's the key. we think it's going to strengthen, and we think the second quarter's going to be extremely important in -- in -- in showing that. and -- >> and we think that the private handoff to this point, the 4% growth, the 6% growth that you speak to, has really been based on a check that's been written by not only the u.s. government, but many sovereign governments. and the minute that that check

disappears, then the private market is standing very lonesome and on its own legs. >> but you -- you must -- you must appreciate that in terms of the government stimulus, the fed isn't going anywhere for a long time. that stimulus is going to stay with the economy. and financial conditions at that low interest rate have been improving dramatically, equities, the dollar, corporate credit spreads have just plummeted, and we just saw a report on credit terms from the senior lonel offican officer sug to easing households and we expect it will continue to improve and perhaps -- and likely you don't agree -- but one of the boosts to growth coming forward is easing of credit conditions. >> well, in fact, the stimulus is going somewhere. the trillion and a quarter in terms of the mortgage market and agency purchases are disappearing in march. the united kingdom has just, you know, abrogated its own program yesterday in terms of $200

billion in stimulus. yes, the government is withdrawing because citizens and politicians are basically saying, enough is enough. >> you know, bill, we had paulson on earlier, jim paulson, who said every other recovery the government has been heavy-handed in, involved with either the fed or with stimulus, he also says we never know where the jobs are going to come from. but, you know, i always think about the guy that said we can abolish the patent office in the 19th century because we've already discovered everything that we've discovered. jobs always come from somewhere. are you sure it's different this time? that seems to be what you and mohammed are saying. >> we're never sure, joe, but we think that it's substantially different this time. based upon the fact that instead of levering, we're delevering, and instead of deregulating, we're regulating. both of those conditions, in combination, produce a very weak economy, very slow growth, and ultimately, you know, have effects on asset markets that depend upon asset depreciation.

>> larry, do you have something real quick? >> so, bill, you seem to believe, i think, that the end of mbs purchases is going to have a significant impact on the markets. we think it's going to be negligible. i think the markets have come around to understand it. the markets can't be so erasal that this is a surprise. and given that, the stock of mbs continues to be held by the fed. the amount of stimulus provided to the economy continues to be there. >> well, there's no anticipation whatsoever in the mortgage market. the models show mortgages overvalued by 40 or 50 basis points, so if the market is beginning to anticipate the end of march, it certainly hasn't shown up yet in terms of valuation. >> i'd let this go to 9:00, but we have other stuff. >> it's like watching good tennis, you know? >> it is. it is. >> federer and murray. although, i don't know who is federer and who is murray. >> thanks, bill. say hi to mohammed. take a look at futures again, if you missed it, jobs

came in for january minus 10,000 which is worse than expected, but the unemployment rate 9.7%, a nine-month low. the disparity between the household and payroll surveys. four months of temporary workers gained, average hours worked up. a lot still ahead including a trip to the trading floor with our cashin.

time for the trader's edge. art cashin director of floor operations at ubs financial

services. good morning. >> good morning. >> earlier this morning we talked about what kind of number would be good enough to offset the mood that we've imported from europe. 9.7 appears not to be quite enough. >> it really is all about the dollar. yesterday was basically a global margin call. you know, the dollar went up particularly against the euro and we had gold down 50 bucks. you had oil off $4. so the economic data took the back seat to where the dollar is going and that may be the case again today although the dollar has calmed down a little bit. you may recall that back in december you and i were talking and you said, you know, what do you really worry about? i said i would worry about a geo political event that would spark a sudden rush into the dollar on a flight to safety. i said, you could be down a thousand points in a day in the dow. we had a very mild rush to safety in the dollar and we were down 270 points yesterday. >> right. >> so that risk is still out there. >> so pull out the envelope. let us know where is key support

and resistance right now. >> well, support would be down around 1050, 1055. early resistance would be support from yesterday, 1070, 1075 and then you got to look back up to about 1087. i think we'll wait until tuesday to let the market kind of play itself out. we may be in a sea wave which could be severe. i don't know. what i need to do is get rick santelli to get behind moving super bowl sunday to super bowl saturday from now on and that'll stimulate the economy. >> okay. after the week we've had, art, we know what we'll be doing this weekend. >> the ice cube don't have a chance. >> it involves frozen water. we know that. >> that's right. >> see you later. >> the keynesians are taking a victory big time. the stimulus worked. >> right. congratulate the president. you guys have been bashing him. now it's working.

blah, blah. >> i'm not sure what part you don't like. the 70% rally, moving from minus 700 a month to basically flat. >> is that from the stimulus or is it in spite of the stimulus or because of the stimulus? >> it's, the stimulus has to be partly responsible for this. >> right. >> the stimulus we think is worth 1.5 percentage points in the first half of the year. >> the 700 billion or the fed stimulus? >> just the fiscal stimulus alone. >> wow. >> i would just say, i don't want to get political here but the republican arguments about it are totally nonsense. they just don't understand how to measure whether -- you can't measure it. you have to estimate it. okay? and you estimate it -- >> we should do more then. >> well, you have to -- there's a trade-off here. doing more versus the deficit. okay? we're stuck. >> all right. the numbers are out. the markets for whatever reason, even with those revisions which were hideous in october and november, october and december, the markets are now indicating a positive. i drove my first car from my parent's home

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futures now above fair value. when we come back the future of interest rates courtesy of our guest host.

on january 1st. >> our guest host larry meyer has been with us all morning. really quickly, larry, if growth is going to be as robust as you think it may be this year, rates will go up, right? >> not the funds rate. and the reason for that is even

with the growth rate we project, and i want to sort of -- the 9.7 i don't think is going to stick. i think we'll go up above 10%. i think it's going to come down slowly. i want to ask you. if the unemployment rate is 9.5% at the end of this year and inflation is 1% do you think the fed is going to tighten? >> maybe a little bit, a touch? can they not move a touch? >> you can go a touch. the minute you start tightening the markets push forward expect ags. the cumulative amount. the first move is disproportionate. you want to be very sure. you know, you don't do it a little. >> larry, it's been great. great friday with you and with you. >> well, thank you. we'll see you in a week. >> in a while. >> make sure you join us on monday. "squawk on the street" is coming up next. it is a morning filled with breaking news. we start with the futures right now which are pointing to a higher open. that's right. we are up 1.5 points on the s&ps, fair value minus 1.75, so 3.25 above fair value good for

maybe 30, 40 points on the dow. >> and they're reacting to the jobs report. steve liesman has that covered. we're also getting a rare apology from toyota, the ceo calling the company's problem a, quote, major crisis. phil lebeau on that story. on the big board investors are reacting to a lot of news. a very big day. bob pisani, an interesting set of numbers. >> it was. you know, the markets were set up, erin, for a disappointing report beginning with yesterday but it didn't happen. futures are up six, seven points since the report came out at 8:30. here is stock news. tyson is doing great, up about 5%. beef and chicken volumes improved dramatically. they beat their numbers by a wide margin. conway is another disappointment. rememberride earth other day? the whole trucking industry a disappointment. numbers are good but the pricing remains very, very poor. air products is unveiling a big, hostile takeover for air gas here. those stocks are moving this morning. i'll have more on that and what it might mean at 9:30. marriott is bringing back its dividend and here's