good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin and michelle caruso cabrera. joe is off today. >> i was going to make a super bowl joke yesterday. >> he sent some pictures yesterday. he's getting things geared up. he's ready for friday's show in pebble beach. >> can we promote who will be on? >> yes, i think we can. clint eastwood. >> clint eastwood. >> cool! >> which is perfect because of the timing of the ad, the super bowl ad, all the controversy that's kicked up about whether this was a political statement or not. we also have bill murray who will be joining us live. >> again, he's so fun. that's cool. >> and joe knows every word of caddyshack. >> larry summers. >> larry summers, randall stevenson. >> randall has not talked publicly, i don't believe, on television at all since the

deal, the t-mobile deal. so this is going to be a big show. >> it is. it is. >> are you going to play golf out there at all? >> no. >> do you play golf? >> no. >> do you caddie? is. >> i like walking the golf course. >> you asked her if she caddies? >> thank you, michelle. >> i figure joe -- because they're going to be out there, i'm staying here. >> i do walk the golf course. i do walk the course. i just don't carry bags with me along the way. >> it's gorgeous. pebble beach along the ocean. a few drinks as you go. >> it has to be the most beautiful walk you've ever taken. it's a walk worth taking. >> do you walk with a foursome or do you just walk? >> you can walk with other guests. i did some myself with other people. >> okay. >> it's fun. it's the most gorgeous course -- i'll show you some pictures. >> it's actually worth walk iin. think of it as walking through a beautiful park. >> you know what mark twain said about golf.

it's a good walk spoiled. >> it is. it's true. we're going to head live to athens in just a moment to get more coverage about what's been happening out of europe. that was an issue yesterday and continues to be one today, plus, we're going to check in with london for more of the mega commodities deal. before we do that more headlines on the home front today. ben bernanke head to go capitol hill. he will be testifying before the senate banking committee at 10:00 eastern time. speak to go a house panel he called the economy frustratingly slow. >> over the past two and a half years the u.s. economy has been gradually recovering from a deep recession. while conditions have certainly improved over this period the pace of the recovery has been frustratingly slow particularly from the perspective of the millions of workers who remained unemployment or under employed. >> you might have expected that he'd be taking that same set of testimony and using it today but that was frustrate bid friday's employment report that very likely changed his characterization. we'll find out today if he

thinks if things are any different. the gdp could be better based on the numbers number from friday. forecasters say it's unlikely we'll get a radically different view from the chairman but, again, we'll be watching just about everyone. a proposed mortgage settlement between states and big banks is moving forward. 40 states joined the deal before yesterday's deadline. california, new york, delaware, nevada, have not signed on yet. banks would pay up to $25 billion in exchange about misconduct and pursuing foreclosures. >> i met somebody yesterday from vegas who said, you know, i know you guys think you're all so cute with this nevada and you take it so seriously because you think the people of nevada take it so seriously. and he said, we actually don't.

he said there are people in vegas who say nevada all the ti time. >> they would say the people from vegas are the carpetbaggers of nevada. we've had people from nevada who really take issue with it on the show who called us out on it which is why we are so sensitive to it. >> i've become sensitive now as well. >> it came from people from nevada calling in. i will -- >> maybe i'm hanging with the wrong people in vegas. >> i don't doubt that. >> thank you. back to the news, we have a few releases to watch today on the earnings front. we're going to get quarterly results before the bell from coca-cola. analysts are looking for a profit of 77 cents on revenue of nearly $11 billion. disney is also going to be reporting today after the bell. the immediamedia giant has seen earnings 72 cents a share with revenue of $11.1 billion. as for the economic calendar later today at 10:00 eastern time we're going to get the labor department on job openings

and labor turnover. so-called jolts report and then the fed releases december consumer credit debt. >> and greece's prime minister and the leaders of the main political parties resuming their talks. they must decide on austerity and reform measures in return for a second bailout of 130 billion euro worth of loans at least. julia chatterley joins us live. julia? >> reporter: well, we continue to wait here in athens and the tug of war, as it has been described to me between the troika, the imf and the greek leaders continues. local media reports here say the finance minister and the troika will meet up this afternoon to it continue that negotiation process. and to look over a draft

agreement that was formulated in the early hours of this morning. so negotiation continue and as the commission said yesterday the ball is firmly in the greek coalition's court. in the euro group meeting it was scheduled for monday, that's remaining flexible until we get an agreement on the forms here in greece and it's pivotal to any further steps in this bailout process. i wanted to circle back quickly to what we're hearing from the population here. you know the two largest unions have been on strike since midnight last night. and the people i'm speaking to on the ground are to point out it's not just a protest about further reform measures but it's also austerity measures but it's also about a protest against the government and their current handling of this crisis. now, though, it's about waiting. we wait to hear more from the coalition leaders when they meet later this afternoon. back to you. >> jewulia, thank you very much. in other market news, saudi arabia's finance minister says it is too early for his country

to offer fresh financial contribution to the imf. the issue is expected to be discussed in the g-20 finance ministers later this month. >> prince alwaheed is sharing his thoughts with maria bartiromo. this is what he said yesterday. take a listen. >> what may happen with iran and closing the hormuz strait but there's a sense that in the vicinity of the $100 both the consumers and the producers fear that price. we will not let the price of oil go more than $100 which means we can use our leverage, our excess capacity to be sure we pump more if needed, we are not -- the consumer countries while they're getting out of the recession slowly but surely. >> and let's see if the prince is right. oil prices this morning are still under $100.

ed 96.23. t the. >> this is pretty interesting with everything that's laying out what's going on with israel. tensions have been stepping up. there was that article in "the new york times" over the weekend that suggested we could see an israeli attack and that july for some reason is the date that has been circled as it's got to happen before that time if you really want to be effective in shutting down their nuclear potential. >> what was the phrase, it's the immunity period? >> there was a phrase from "the washington post" article earlier monday. >> there's a moment before where you can still do 0 it without -- without what i don't know. >> i look at the oil markets and i see it sitting around the price that it's sitting at and i wonder if they don't look at this -- did you watch peanuts when you were little? remember the adults? the teacher?

for years we have heard this discussion between iran and israel, right? is this now really the time? is this it? are we at this moment? >> and you're skeptical because? >> i think oil would be higher, no? >> i was more skeptical before reading some things from the last few days from barack. what they are considering if they go ahead with the strike. >> and barack obama. >> which barack are you talking about? >> it struck me they are seriously considering this with or without u.s. support that they could go ahead with this and they know there will be retaliation and they think it may be something that is worth going ahead with to keep nuclear power or nuclear arms from the region and their perceived self-defense. >> the rhetoric is much hotter than it has been in a long time. in the end -- >> you're down playing -- it if you're israel, here you are -- >> it's only nine past the hour.

it will be much hotter next week. >> you want to do the peanuts thing again in case they're watching? >> ehud barack pointed out they would like it to wipe israel off the face of the planet. >> but for decades, right? >> if they have nuclear power, if they have nuclear bombs it changes the equation, i would think. >> and if there is this window, what's the window, april or may through -- >> through july. >> early july, whatever it is. >> that would be shutting down -- >> right. >> i don't know. >> it could be very ugly. >> it could. >> you're right, the oil markets not buying into this. still sitting at $96. >> we go to israel because there's an economic impact that happens regardless because you start to react, start to discount in far worse possibilities than you previously thought and that has an economic impact for sure.

>> did i save myself? >> sort of. let's check on the broader markets, the futures right now, despite the deep uncertainty about what's happening in greece, a little bit of a shrug, the tou down 17 points yesterday. considering the rally we had up until now. the s&p would open lower by four. let's see what the ten-year yield is telling us, maybe there's any rush to safety there 1.9%. we're seeing treasuries actually lower this morning after they rose yesterday and the dollar versus the euro and everything else. the dollar is stronger across-the-board against the yen, the euro and the swiss franc. 1.31 for the euro. it will cost you 1.31. and the price of gold which pulled back so dramatically yesterday morning is lower. $17.18. $1,700 per ounce. >> it's hard to get used to gold

at these prices. bp reporting a rise. the oil giant increasing its dividend by a penny a share. the company says it is preparing vigorously for lawsuits related to its gulf of mexico oil spill. dudley says bp is ready to settle on what they call fair and reasonable terms. he also adds he's ready to fight. ebs posted a loss be a the swiss bank is also warning that global economic concerns could generate head winds for revenue growth in the current quarter. toyota is reporting a stronger than expected profit. they are raising its annual forecast on cost cuts. hackers sought $50,000 in return for the stolen blueprints to the company's flag ship product. i would think you would want more. symantec set it was uncovered in

a sting operation. >> $50,000 will go a long way when you're somebody who sits in a bathrobe behind a computer. you need some new clothes, some underwear. i guess they weren't trying to get greedy. >> remember when "dateline" used to do catch a predator? this could be catch a hacker. you wouldn't watch this? >> i don't think it's compelling television. >> was it chris -- what is chris' last name? now i'm embarrassing myself. chris hanson. >> let's move on. >> i think to catch a hacker would be great. i'd watch. you could do a special for cnbc. >> that would be good. great. time for the global markets report. ross westgate is joining us live from london. ross? >> hi, michelle. thank you for that. we are ahead of the u.s. open a little bit low right now.

flat close yesterday. right now advancers being outpaced by decliners by less than 7-3 so you can see. european stocks down 12 or 20 points. we're about two-thirds of a percent lower. the ftse mib down -- well, absolutely flat. we it did hear out of the ecb and the bank of italy this morning that italian banks took around $210 billion out of the ecb in december which shows you a large chunk of that ltro went to italian banks. the earnings have been in focus. a number of key stocks, bp upped their dividend a little bit. the q-4 profits were better than expected mainly because they paid lower tax rates so they're slowly getting back to where they need to be but it's a long, drawnout process.

arcelormittal came out today and said the first half is going to be better than we thought. ubs today came out with fourth quarter profits that were much worse than we might have thought and are talking about a tough first half, the stock down 0.8%. and it got confirmed xstrata and glencore will try to merge. they've announced the terms of the deal this morning. shareholders are getting 2.8 new shares in this merger. xstrata share hold 0ers will go through with 45%% of the enlarged group. the xstrata ceo would be ceo of the enlarged group. the guy who is buying the company would be number two. xstrata stock down. glencore down 2.25. we've seen a number of shareholders stand in line and say they don't like the deal. they think they could get a much

better premium than they're getting off glencore. expect that to occupy some minds and invest ost over the next few days. rates were kept on hold boosting the australian dollar today. there were expectations it would be cut. the euro against the aussie dollar at an all-time low. also a six-month 0 high against the u.s. dollar. euro dollar back over here 1.3120. i think we've decided until we actually get a firm announcement out of greece we're going to try to ignore it. probably the best thing to do. back to you guys. >> ross, before you go, let's talk about this deal, $90 billion on a tuesday morning is not a bad deal day. we'll take it. this is a company that would have $2009 billion annually in revenue. were you saying some of the investors not so happy but what's this tie-up look like from a regulatory perspective? and i ask it only because when you put two companies of this magnitude together the antitrust

regulators say something. >> it's more of a vertical venture. the european commissioner was going to look at it. they should look at it. they should look at any merger as a matter of course. people were scratching their heads and trying to work out, well, where would the antitrust issues come in? you have to measure them up against the likes of bhp and rio. some guys said i'm sure they'll look at it but they were trying to find out whether there were any real grounds to block at all, any grounds to say you have to make divestments. you never know with the european competition commission. >> the premium about 15%. what are xstrata investors saying they want for the deal? >> and it's not even 15%. that's on where the xstrata share was before the deal.

since then glencore share price has moved so, in fact, it's around 8% in reality. typically if you're looking at a merger, andrew, and you've covered a lot of these, you would want 20% to 30% would be a decent sort of premium, wouldn't it? >> yeah, but i was looking at th this. oftentimes you do 0 it on a three-month moving average and it's closer to 30% along those lines. it depends on how much cash you want for those shares. >> the other side of the coin is does xstrata have other options? in the long run this may work out. >> between their exposure to europe and what they want out of china this may make some sense. >> yeah. and in the long run people are then saying, well, this group -- you start looking at it if it goes through what that means for the likes of rio and bhp so they've become another big gorilla in the room. >> ross, thanks so much this

morning. appreciate it very, very much. >> no problem. >> see you soon. coming up, a report on congressional earmarks that may have you doing a double take. the findings from "the washington post" up next. and then later a man who needs only one name, the donald. mr. trump is going to be joining "squawk" to sound off on everything from politics to aisle to a lot more coming up at 7:30 a.m. eastern. as we head to a break, take a look at the global market headlines. americans believe they should be in charge of their own future.

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welcome back to "squawk box." u.s. equity futures suggest the s&p would open lower three points. the dow by 22. nasdaq by almost two. that's after a small decline yesterday. making headlines this morning "the washington post" reports 33 members of congress have steered more than $300 million in earmarks and other spending to dozens of public projects that

are next to or near the lawmakers' own property. there's gambling in casablanca as well. under congressional ethics rules this is both legal and undisclosed. the review by "the washington post" found 16 lawmakers who sent tax dollars to community programs where their spouses, children or parents worked. >> are you shocked? >> people don't change. people in congress don't change. their human nature is the same. >> talking about gambling in casablanca coming up, caeser's ipo, delaying the details up next. and then attention james bonds fans. the real mrs. moneypenny will be joining our set. what she thinks every individual investor should know. and then later one show, two original members of the exclusive club. squawk icons and rebels, donald trump at 7:30 a.m. eastern and, yes, pimco's mohamed el-erian.

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♪ and i keep this world from dragging me down ♪ ♪ going to stand my ground and i won't back down ♪ a little tom petty on a tuesday morning. he was on "the voice" last night, is that what you said? somebody was singing tom petty on "the voice." welcome back to "squawk box." i'm andrew ross sorkin along with becky quick and michelle caruso cabrera. making headlines this morning the pricing of caeser's ipo has been delayed. an underrider says that is due

to a technical glitch. under writers received from regulators relating to the ipo prospectus hoping to open sometime in the afternoon. should have had our own courtney reagan who was out there figuring it out. think think she said at caesars. ever see "the hangover? "my favorite line is when it goes up to the registration and says is this really caesars palace and says it with a straight face. >> is he says is this where caesar really was? >> is this really caesars palace. >> an inflex. >> the company earned $1.21 a share, 4 cents above estimates. it cut its outlook by 15 cents a

share now at 5.60 to 5.70 a share. analysts pegged 2012 estimates, that's the 10 cents. let's get a check on the markets this morning. we are seeing a pullback this morning but, again, dow futures only down 26 points right now be a given all the headlines out of greece you may have expected more of a pullback he especiall after the big gains we saw in the first five weeks of the year. the s&p had its best start in 25 years. the beginning of the year and right now you see the futures are only down by three and a half. oil below $100. right now trading down 59 cents to $96.32. yesterday prince alwaleed made comments to maria on "the chosing bell" saying they make sure prices do not go above $100. they will make sure they will bring extra supply to market if needed. the ten year if you've been

paying attention has been showing just above 2% again and yielding at 1.908%. we do have ben besrnanke headin to capitol hill again today. we'll see if he changes his tune about how long qe is going to be around. particularly qe-3 if we see numbers like friday with the jobs report. the dollar this morning you can see is up across the board. y euro at 1.31. dollar yen at 76.77. gold prices have been down. take a look now you'll see gold prices down about $8.40. $1,716.50 an ounce. >> if you have questions or comments e-mail us. coming up, mrs. moneypenny. yes, you read her in the ft all the time. she's a l columnist. >> this is very exciting. she's a real person. >> is she here physically in person? >> i believe so. mrs. moneypenny herself.

>> not from the james bond series. >> no, this is the one who dispenses financial advice. >> and interoffice politics. >> she has a very sharp tongue. >> it's awesome. >> great way with words. >> fun. all right. why she has more than a few words of advice for all of us.

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welcome back.

dow futures are down by 30 points. s&p off 3 1/2. we continue to follow what's been happening in europe, and this is a live picture from athens right now. the unions there calling a strike today. the work stoppage comes as greece's prime minister and the leaders of the country's main political parties are resuming talks today. they must decide on new austerity measures demanded by the eu in return for a second bailout but, guys, this is the story that we keep waiting and wait i waiting and the deadline keeps getting pushed back and pushed back. we thought we would have something over the weekend, something today. once again today it's trying to get all of these political players on the same page has proved to be a very difficult task. >> torturous set of months. we've shifted now. we used to be waiting for an agreement. 9 they got that. now we're waiting for -- we're not even sure that they have an agreement with the private creditors. does greece have a deal with their public sector lenders of last resort. >> and apparently there's an

election in april. this could be trouble. all the outcomes are bad. you have to choose the with one -- >> moving to a less serious topic -- i want to say this is serious stuff. a big question of the morning can women have it all? i am excited. a new book says the best thing women can do for their careers is to try to stop trying to have it all. you guys may have is a view on this. i don't know. the author is with us this morning, dr. heather mcgregor, better known to our viewers as mrs. moneypenny. i have been reading mrs. moneypenny forever. she is the author of "sharpen your heels." thank you for joining us. we're just -- we're not calling you heather. >> you can call me mrs. m.

>> i think a lot of men, by the way, read your column. perhaps even more so than women because we're trying to get a read into the psyche. >> that's right. every year i public a list of what i want tore christmas and a lot of women tear it out and put it by their husband's bed. >> for those people who don't know about your column, you answer questions about things like -- and one of the questions -- and it's an interesting question, my boss is taking clients to like a strip club or golf and -- but i don't play golf and i'm not going to the strip club. what am i supposed to do, right? >> yes. find something your clients would like to do as well. there are mreplenty of other things. >> you don't suggest go to the boss and complain that you can't go to the strip club or being a female you wouldn't want to. >> or go to the strip club. most of these women are very interesting and have other lives -- >> so you're recommending going to the strip club? i love mrs. moneypenny.

be becky here doesn't play golf -- but she's going to pebble beach but she's going to walk the golf course. >> yes. and you'll meet some great, interesting people doing that. >> i have. >> more interesting than sitting and watching it on tv. >> let's go through the premise of the book. the premise of the book and my wife was talking about this last night, i think of my wife as super woman and she's trying to do everything all the time and she is stretched all sorts of ways. we're all stretched all sorts of ways and becky now has a new baby. she is stretched all sorts of ways. you say you shouldn't be trying to do everything all the time. >> you should try to do the thing you are great at. becky is great at presenting tv. at this time in the morning she is not with her child. she is here presenting tv and presumably somebody else is looking after the child and i'm sure the child is happy. >> she abandons him every morning. >> women are not great at saying no. >> but who are we worse to saying no to, our families, our employers? i've been trying to figure out what you mean by saying no. i'm trying to figure out who do i say no to. >> if you are asked to do an

extra shift, you know, at cnbc or you are asked to go later on when your child is older to go to parent/teacher night when you have the opportunity to did a major interview. what are you going to choose? it. >> i don't know. great question. >> it doesn't feel great to say no. >> i want to know how to say no and feel good about it. forget about women, i have this problem saying no. >> i can tell you the best way to learn to say no is to realize it doesn't feel great, okay? it's like having your legs waxed t. doesn't feel great for about two minutes. >> most of the men are not going to appreciate that point. >> it doesn't feel great for about two minutes but after that the benefits are with you for a long time. is there a nice way to say no? >> yes. more seriously i do explain how to do that. so if you are asked to appear for a charity appearance which i am often and i'm sure you all are and you don't want to do that pause you would rather be with your fmly. no, but i'll send you a copy of my signed book to auction. so say no nicely.

>> i like that. you've written a great book. several, in fact. send books and write a personal note. it will take you two minutes. going to the charity function will take a lot more time than that. >> one day in the newsroom there was a woman younger than me and the glass ceiling came up and i turned around and said, do you know what the glass ceiling is? oh, yeah, we read about that in sociology class. does it still exist? >> it never did exist. there's no such thing as the glass ceiling. the way we get rid of the glass ceiling is the myth that women can have it all. here in america -- >> i don't think it's a myth. i think it is can you rise to the top as easily as men. >> honestly, it's not that. it's not there. if it men want to get to the top they have to jet ison the same things we do. you have set the example here in the united states. do you know that five of our top

100 companies are led by women, which is pretty crap statistic but three of them are american. >> love it. >> and it's the three interesting ones because the other two are running a fund management company. and the other three are running anglo american, berberry and pe pearson. they are people who own the "ft." that's why you have so few women at the top in your country. you are sending them to us. >> do you believe their life is balanced? >> no, i don't. >> and that's fine? is. >> they choose their priorities and stick to them and are true to them. >> balance to me is so overrated. if you want balance in your career, go be a bank teller, right? work from 8:00 to 4:00 every day. >> it depends on what your balance is. you need to set your priorities. my priorities are in this order, my career, my children, my husband, my friends and me. >> and you have no guilt saying my career above my children?

>> no because in the short term that's my priority because in the long term my children, and i'm sure all of your children will be better served by you focusing on your career now. >> what do your kids say back? do they feel a pushback? >> they're very good about my work. they complain sometimes when i write about them in print. cost centers one, two and three. i told them, you know what, as soon as you stop being earnings, i'll stop writing about you. >> this is so refreshing. what makes me crazy is inevitably there's some woman at the top of something, either a top tv anchor or a ceo and the headline in the newspaper or on t the tv is how does she balance work and motherhood? >> she doesn't. >> yet they never, ever ask the man, how do you balance work and fatherhood? it never owe can curse to them that it's an issue. >> do you think anybody ever asks barack obama that? how does he balance his job and fatherhood? and they would never do that. >> but is it harder for women? >> it's harder because people

are socially conditioned, that's what they've learned in sociology class. >> are we conditioned? >> we are can conditioned to please. men are conditioned to perform. it's so difficult to say no. and i even managed to break my arm -- >> i saw that. how did you break your arm exactly? >> i failed to say no to enough party invitations so in davos at the world economic forum i went to too many parties and i was rushing between parties and broke my arm in the snow. >> and who saved you? >> a ukrainian billionaire who leapt out of his car and found a driver from his cavalcade and emptied the car and sent me to the hospital with the driver. >> because he knew who you were? >> i don't think he did but i was a damsel in distress. >> if i would have broken my arm, i would have been left in the snow. >> cnbc car driven there i'm sure. >> we can only hope. thank you for being here. this was so much fun. >> learn to say no. >> that's the trick.

but it's how do you say no. i still want to work on that. >> i think women still have to learn to do it, "a," and then to do it nicely. >> the book is called "sharpen your heels" and i think it could apply for men and women. thank you. appreciate it very much. still to come one of the best parts about filling in on "squawk" we will head to the chairs and talk about the more offbeat headlines of the morning. and then the top of the hour, deal maker donald and another donald, donald trump. never one to mince words. he will join us live at 7:30 eastern time. we will ask him everything from politics to the economy. nothing is off the table.

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♪ you can talk to me welcome back, everybody. we are in the chairs this morning focusing on some of the stories that have caught our attention and we know how much can be on pension plans and how

states will be worried they're not going to have enough to pay out the employees, the promises they made over decades. as a result it has a lot of these lawmakers looking more closely looking for closely at what they're doing themselves. there's special programs for legislators. "usa today" did ap. investigative series looking at the perks and plans for legislator s only. you wouldn't believe the anger we get from the e-mails, congress should not be passing any laws they are not bound by and shouldn't tell us what health care plans we have when they have the special health care plans. nine states are looking into changing and cutting out the loopholes for just the lawmak lawmakers' pension programs. this is not fair and you should not be kept above the cuts when you are asking state workers to take so many cuts at the same

time. >> do you think anything will change? i find it hard to believe. >> i do think they are. >> you have a front page story. >> there's a front page story of congress of insider trading, what happened to that. >> some of the legislators and governoring who are saying hold on a second, some with the express goal of the constituents saying we want cuts in spending so clean your own house first. they point out nik nikki haley, allows you to be working, drawing a pension and trying to make cuts to other state workers. >> it's a whole hypocrisy. >> you have a great column today. >> about facebook and how many

users they have. if you read the prospectus you would think they have 845 million users and we talked about it last week, they have 400 million some odd active daily users. >> i have a facebook account i don't use very often and i thought the 800 million was exaggerated. i heard the 400 plus million that's a lot of people who check in every day. >> you would think an active user goes to facebook.com. if you went through the prospectus they define somebody active who engages facebook, you could use the "like" button, if you were at nhl.com and pressed like, that counts. if you shared music on spotify, that counts, if you tweeted and shared it through facebook that counts but you may never go to

facebook.com and you're an active user. >> i understand you're using the platform but if you're an investor thinking this is a way you to monetize the users to get an ad next to them. >> you can't put an ad next to the "like" button. all of the tools creates a treasure trove to mine when you get to facebook.com. the question is whether perhaps and maybe they'll change it in the s1, unique users to the site versus people using the platform more broadly. >> this is a newly public company eventually, you assume they're going to grow over time and transparency and maybe if they deem investors really want that metric and that helps them out, they do it. >> did you get a sense what difference there is between those two numbers? >> hard to tell. by their math they're off somewhere between about 40 million to 80 million users in

terms of people who are active on a monthly basis compared to people who are actually on the site. if you take straight up nielsen numbers and extrapolate there are probably 40 million to 80 million, maybe more who don't go to the site at all. >> you're talking about a number north of 400 million. >> absolutely. >> geez, that's huge. >> we could be talking about 100 million people who disappeared from their numbers so there is, you know, even if i told you 40 million people. >> what i don't understand is why they wouldn't make that number public as well, north of 400 million why don't you just tell. >> they looked at google, twitter, others, only talk about registered users so they were trying to show engagement, the sense people use their site. the question is whether they should make a distinction or put a definition on page one. the problem is if you look through the first couple of pages you would never understand

what they mean by active users. >> in the name of self-interest my topic. i'm on the board of ballet hispanico and they are in the giants parade today. tune in 11:00 a.m. and watch them perform, a national dance troupe. >> we'll dip into it live on the air, sure. >> this was fun. coming up we'll play "let's make a deal" with donald drapkin, casablanca capital will be our guest host and then exclusive club, every guest wants to belong but only a select few are invited, the squawk master class, today inducting a new member. here's a hint, he oversees $400 billion in assets under management. we'll welcome him at 7:10 eastern. who it will be?

sam zell, the investment guru who never pulls his punches and we'll talk economic and politics with austin goolsbee, 6:00 a.m. eastern tomorrow. jooirkz and where you'd like to be. we know you'd like to see the same information your advisor does . g on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement.

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donald times two. first billionaire, donald drapkin is our guest host today. >> are we ready? >> then the donald. trump joins us live to discuss the mitt romney endorsement, the trip back to the board room, and more. and from master in training to master of the universe.

>> i am iron! >> we'll be inducting a new squawk market master. the second hour of "squawk box" begins right now. ♪ ♪ "the >> good morning, everybody, welcome to "squawk box" on cnbc. i'm biggy quick along with andrew ross sorkin and michelle crew sew cabrera. don drapkin joins us, a billi billionaire investor. >> did you just cringe?

>> my net worth had gone up by a considerable amount of money and she's going to make me pay for dinner the next time. >> so your net worth has gone up recently. we'll talk to that in a minute as to why. >> not again. >> don is with us over the next two hours. we have a lot of ground to cover today and crowning a new squawk master this morning. he's getting ready for his big debut in our board room. >> we'll show who he is? >> we're not going to tell. you got to stick around before we tell you who he is. we'll get the news headlines today. becton dickinson's quarterly earnings from $5.60 to $5.70, which is below what the street was expecting. becton dickinson talking about higher costs related to

acquisitions as part of the reason for the cut in guidance. the bid is at $75, the ask is $76.50, after it closed at $80.53. the saws eprince gave maria bartiromo his thoughts on growing middle east risk and oil prices. >> iran and the possibility of closing the hormuz strait but there's a sense that in the vicinity of the $100, both the consumers and producers are satisfied at that price and saudi arabia said we will not let the price go more than $100, we can use our leverage and excess capacity to pump more if needed, to be sure not to go over $100 so it will not impact the consumer countries while they get out of the recession surely and hopefully. >> oil prices well below $100.

$96.23w50i7k9 $96..76. the sorkins fair value all red arrow this is morning. leaders hoping to ink an agreement on harsh cutbacks to avoid a massive default. julia chatterley is following the latest from athens this morning. >> reporter: we're getting reports of clashes between protesters and the police. sparks of violence like this are not unusual in the protest and the crowds are quite small so i do want to make the point that this is nothing like on the scale that we saw last summer and of course you witnessed firsthand, michelle. there have also been reports of a german flag being burned, too, outside the parliament building

to symbolize germany's ongoing role in the details of the bailout crisis and angela merkel impressing the further need for austerity measures. strikes continuing, they began at midnight with the two largest unions in the country representing around 50% of the workforce so it gives you some idea of the difficult position prime minister papademos finds himself in at this point. he's negotiating between wary coalition members unwilling to put their name to additional austerity measures and demands from the troika, the eu, the imf and the ecb and the population unwilling to face additionaltus austerity measures. later on 4:00 p.m. athens time we intend or hope to see a confusion to these talks on

reforms and then we can push ahead with the further steps in this bailout process. back to you in the studio. >> thank you, julia, 4:00 p.m. athens time is 9:00 a.m. east coast time so we'll be watching then. tensions with iran and syria driving up the cost of oil. the u.s. slapping more sanctions on iran in response to tehran's nuclear program, violence intensifying in syria as the government cracks down on dissent. larry is a senior fellow at the center for american progress, ian bremer and guest coast donald drapkin as well. we look at the price of oil pretty flat over the last couple of months. is this situation worrisome or is the old market telling us not to be worried about it? >> it's worrisome in the medium term but there's been a lot of talk recently from sarkozy directly for example, some hearsay about what secretary panetta has been saying, the

israeli strikes may be eminent against iran. what's very clear is that they're going to give the sanctions a chance to play out. we won't even have the full implementation of the european oil sanctions until july 1 against the iranians and americans and israelis are working on that. the likelihood of israeli strikes is effectively off the table and the israeli government has not made a decision what they're going to do should the sanctions fail as many feel they will. the iranian provocative behaviors we've seen in an attempt to kill the saudi ambassador of the u.s., and ships in the straits of hormuz, that is ongoing and creates market tension, certainly a lot of inbound questions we've been getting over the last couple of weeks but not coordinated from the highest levels of the iranian government. so far there's been more smoke than fire. >> larry, does that change in

your estimation, if so when and what does that mean? >> well i think you have a disconnect between israel and the united states. the united states policy is we won't let iran get a nuclear weapon. the israeli policy is we won't let them get the capacity to do it, and so that means if they were to act, they were to act early and i think that's the split between the two but i think ian is right we're trying to tell the israelis see how the sanctions work. the other problem you have is that we don't know who is in charge in iran right now because you have mahmoud ahmadinejad, he and the clerics are not getting along, the quds force probably behind the attempted assassination of the saudi prince so even if you could sit down and talk with someone you don't know who you could, nor is there anybody there powerful enough to make whatever agreements you might want to make so that they could basically allow the inspectors in to find out exactly what's going on.

>> so you have done a great job laying out twhat's going on, ia, why the uncertainty? >> given the destruction over the last six months there's been a feeling creeping towards $100 has geopolitical premium in. i don't think the risk premium on iran in oil prices today is zero and i think the saudi statements have made some impact though clearly were the straits of hormuz to be closed they wouldn't be able to respond to that. we're in a wait and see mode. when we get to the summertime and when these sanctions fail and i feel almost certainly they will and the israelis start posturing as if an attack is truly eminent, i don't think they'er th this' going to do it and it's plausible, it's not just about iran. the troops are all gone in iraq, you see fragmentation there, you

see much more difficult time in putting together an effective government in libya, which means the oil upside isn't there either. geopolitics around the middle east and oil supply is clearly going to spike over the course of 2012 so we're not there yet. >> he doesn't think ultimately the israelis do it. what tuning? >> i think the israelis won't do it without us, because i think it's very important, we have this relationship with israel, and basically if we make it clear that i think secretary panetta or general dempsey have made clear for them not to do it, they would risk too much, and basically we also have to wait and see what happens, how syria plays out because israel not only has the iran problem, we don't know what's going to happen in egypt with the muslim brotherhood coming there, whether they'll maintain the same relationship with israel that former president mubarak did. we don't know how syria is going to play out and remember, in syria, you have the iranians

have a vested interest in what happens in syria, so i don't think you're going to see anything, you know, this year where the israelis do, nor do i think the united states wants it, barring some drastic action on the part of the iranians and i don't think the iranians will close the strait of hormuz because if they do, they'll have problems because it will undermine their economy which is already in terrible shape. i mean the value of their currency has dropped by about 90% this year alone. >> does that mean that by july, the a rhinians could have nuclear weapons? we talk about trying to do this diplomatically and trying to do this by shutting things down and going in and inspecting but the idea put out over the last week or so is that if it's not done by july this is an inevitability. is it? >> no. the important point is will they have the capacity. they're not going to have them for the next couple of years but that's the point i try to make in the beginning. the israelis are worried once

they have the capacity it's too late. in terms of military point of view they'd like to stop them before they get to this capacity. >> is it? >> no, i don't think so, i don't think so. to the iranians to the extent they can get their act together will get shrewd but they don't want to go close. if they do, there would be justification for this attack. it's interesting, i can go back to 1994, show you people kept saying they're going to have it in six months, have it in six months and keep saying that but they have not crossed that threshold yet nor do i expect them to do that. that would give people a reason to make military action. >> thank you for joining us this morning. appreciate it. >> if you have comments or questions, shoot us an e-mail at sidewalk@cnbc.com. still to come the trump card an today's three presidential contes contests, conalleged trump will be on the phone with his

controversial movement to endorse mitt romney. and our new master of the market will be revealed, the official inauguration right after this. have a comment for the crew? share your thoughts following "squawk box" on switter, guest updates and behind the scenes access to your favorite morning show is a click away, "squawk box" on cnbc is coming right back. do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] now there's a mileage card that offers special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? ♪ [ male announcer ] the new united mileageplus explorer card. get it and you're in.

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checking the futures right now, we've got images of coca-cola just passing us, waiting for quarterly numbers from dow component coca-cola, coming up in a few minutes. analysts looking for fourth quarter profits of 77 cents a share just under $11 billion in revenue. walt disney will be reporting its numbers, disney earning 72 cents a share for fiscal first quarter on revenue of $11.2 billion and are you a coke or pepsi? >> coca-cola. >> can we say that allowed? at the moment this is a pepsi table. >> i love coke zero. >> interest coming, it's a pepsi table this week. >> i don't drink a whole lot of

soda. >> i like splenda, that's why i like coke zero. >> we've been teasing you about inducting a new squawk master of the markets. finally, jonathan baum, chairman and ceo of the drapis corporation. jonathan thank you for joining us this morning. >> great to be here. >> we want to talk about what you see and what you think is the important way to push people these days. one of of the things you really focus on is globalization. you say you can't just look to the u.s., you still need to focus around the globe. >> i think the lead-in was pretty good. what you saw going on in the middle east, there's volatility is the big problem with a lot of retail investors have had, since 2008, high levels of volatility intraday gotten americans off the long-term goal. most americans cannot retire and funding their dreams buying

longer duration assets almost priced near zero so they're heavily invested in the u.s. when you look institutionally most institutions have 40% to 45% of the assets overseas today in global investments and the average retail investor has about 5% so we think it's dlecl as people look to the future for better returns not only do i invest in the u.s., i have my home here and job here, i have to look for better returns outside of the u.s. >> gets tricky when you see some of the headlines around the globe, greece talking about some of the concerns about europe. where would you be pushing people? those growth markets we used to look to like china or india, growth levels are coming down there, too. >> again they have a lot more ability on their policies right now to continue to manufacture their growth over time, and it's really interesting from our standpoint we tend to look at emerging markets as a risky bet. most countries were more solvent in the last four or five years

than the developed countries. developed countries have big problems today, whether the zero bound rates you're seeing in the u.s., europe and japan and the inability to affect policy that much. you're not going to see great growth so we continue to think you'll see growth from u.s. companies but those that invest overseas so we're not saying you go all outside of the united stat states. we believe large cap u.s. companies that get a lot of profits from overseas do well. you look at emerging markets bonds, you look at international bonds, huge opportunities to invest in both governments and emerging corporate markets overseas that get better returns and continue to because their policy or their flexibility in being able to work their policy and their growth is a lot better than the developed countries. >> europe is not a place you're telling people to look? >> no, we think right now if you look we're in a global growth recession which is you're not in a recession, you didn't double dip. it's going to grow but slower. europe is in a recession in our opinion, went into a recession

probably in the fourth quarter and it will be a full blown recession. we wouldn't invest a lot in europe today. there are a lot of very good opportunities outside of rurp. the tail effect of what's going on in europe is muted in china and india and brazil and a lot of latin america and the middle east so there are opportunities, and we think the growth will continue to be there. there's also very good sovereign paper you can buy today that will give you a better return. we're buying u.s. paper today. the average u.s. investor invested in the last five years almost entirely in u.s. government bond funds and at the end of a 30-year secular decline in interest rates. there's been bull and bear markets throughout that period. where are rates going to go from here? they're at zero. i wasn't good at math but at some point they're going to go higher and people are funding the long-term dreams, locking in earning a return that's negative. so we're saying to people it's time to look at an extension trade.

you really need to do that. >> people who were betting against treasuries last year didn't work out so well for them but this is something you think is now eminent? >> i don't know that it's eminent. i get worried when people say it's the next three months, six months. what is your time horizon? >> i think most americans are 55 to 58 years old, the average american, retiring later. >> what is your name horizon for making this investment in terms of when do you think things move? >> the answer is you scale it. i would say it's not a binary switch. you don't say i'm out of bonds and into zokz. that would be a dangerous move. what happens is you see a huge imbalance occur. people who owned equities in '08 went out at the wrong time and got into bonds. >> what do you say to people pushing retirement who in theory should be scaling into bonds and yield is horrendous. what do you do? >> they should be scaling into bonds, that's a theory, i'm not sure it's the right theory.

dividend paying stocks, you can buy a dividend income fund as a retail investor, you can get a net yield of 3.5% plus and the potential to have groet on top. you know you're going to have a demunation of growth over time and underinflation. buying more bonds before retirement is wrong. i don't know when it's going to be whether to your point, three months, six months, nine months. i want to retire in ten years, i want to send my kid to college. i need to put a plan in with an adviser to move me out of this imbalance and that's what we think is important. it's interesting, i was traveling out and i talked to advisers. they know this is there today. they're just afraid to make the move and so we're saying to them, don't do it as a one-time, you don't get out of all and into the other. work with your advisers. >> so you'd be buying high

dividend paying u.s. multinationals, the ngs of the world for growth over the next ten years? >> here and abroad so the u.s. multinationals that do well, i think they're a great opportunity. if you can get 3.5% yield today and i would do it globally as well. i think it's going to reward you, plus you have the upside potential. >> jonathan i thank you very much for coming in today. >> it's my pleasure. thank you for making me a squawk master. >> congratulations. >> welcome to the wall. >> thanks. coming up squawking with donald trump, his thoughts on mitt romney's momentum, the big gain and his trip back to the board room, back on nbc. plus drug testing for jobless benefits seeping into the payroll tax cut discussions. congressman kevin brady on the reforms he wants to see. "squawk box" returns after this. ttd#: 1-800-345-2550 let's talk about how some companies like to get between ttd#: 1-800-345-2550 you and your money. ttd#: 1-800-345-2550 at charles schwab, we believe your money should be available

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we're back. fed chairman ben bernanke listen testifying before the senate banking committee today his second congressional appearance in a week. bernanke testified before the house budget committee last weekend. there's one key difference between then and now, friday's big january jobs report which was much more upbeat than expected. investors will be watching to

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welcome pack. from the super bowl to presidential politics to the apprentice, donald trump is dominating the media and joins us on the news line with more. he's also the author of "time to get tough" and donald great to have you on again this morning. >> good morning. >> i want to talk to you about your endorsement of mitt romney last week which caught a lot of people off guard. the early word or rumors that were out there, you were going to endorse newt gingrich. what happened? how'd that get out there and did it surprise you?

>> well, as they admitted they were put out by the other camp and i've been friendly with honestly friendly with mitt for a long time and newt, i like them both very much but i feel that mitt's dedication to bringing back this country in terms of what's happening in the outside world, what's happening with opec, what's happening with china, what's happening with india, what's happening with many countries, but in particular china and the opec nations, i felt his stance was by far the strongest. >> he has been pretty outspoken about china in particular. i wondered if that was something you caught early on from him because you made a lot of comments what you would do with china if you were in charge. >> he called me about it. we talk about china and for some reason candidates don't pick it up, what china is doing to this country is taking the money out of our pockets, our leaders don't have a clue, and he was the one person that really was out there and is out there with respect to china and he's very

strong on china. >> what he has said on china is that he would push back almost immediately in terms of some of the currency issues and some of the manipulation. what would you like to see him do beyond that? >> he said also he'd declare them a manipulator. their currency is unbelievable. they manipulate their currency beyond anything anyone's ever seen before and makes it impossible or very regard for our companies to compete with their companies. it's a difficult situation our country is in but honestly they do so much more with us than we do with them, they don't want to play games because if we put a tax on china, they would come to the table so quickly, becky, that your head would spin. they would do whatever we want them to do, believe me, we have all the cards. they do not have the cards. we have the cards. >> donald, it's michelle

caruso-cabrera. >> hi i hmichelle. >> every republican candidate came to kiss your ring. between you and me, any of them you talk to oh my god there's no way on earth i'll ever endorse you. >> i wouldn't endorse ron paul obviously. he'd have no chance of getting in and in all fairness rick santorum the man was a senator in pennsylvania. he lost his election as a sitting senate by 19 points, and then he says oh now i'll run for president. give me a break, okay? he set a record, this was a record in the history of the u.s. senate, 19 points for an incumbent senator was a record loss. now he loses, so this is almost like you know i failed the test and now i'm going to go to the wharton school of finance. it doesn't work that way. >> donald, just to go back to china for one second. it's sorkin. >> hello, andrew. >> jon huntsman and others if you took the approach romney and you want to take, it could spell

disaster for us. you don't buy that at all? >> jon huntsman during his tenure being over in china, this country was eaten alive by the chinese, and by the chinese leaders. he is the least expert on china, and i thought his stance on china was by far the worst. he basically dropped to his knees and said sir, do whatever you want, i'm waiting for you. jon huntsman was a total and complete disaster when it came to china and look at his ten tour. it was weak. it was ineffective, and our country went to hell. >> if we could hold on one second, coca-cola earnings are out, fourth quarter 77 cents, non-gaap 79 cents, expect 77 cents. full year volume growth 5%, european volume growth 1% and still looking for a revenue number here as it comes out, china volume growing 10% in the fourth quarter. i'll dig through this more.

>> the important question for do donald, are you a coke or pepsi man? >> i can't believe we interrupted china for a small company like coca-cola. >> are you a coke or pepsi man? >> i like them both. i've done a pepsi commercial. >> who advertises on "the apprenti apprentice"? >> both. people love "the apprentice." everybody's one of our advertisers but no they're both great companies. i think china is slightly more important but these are minor details. >> donald, when are you going to make a real run? >> i've really looked at it hard, and i did have a problem because as you know, with the equal time rules i'm not allowed to run during the course of the show, so i wasn't able to do that. i just think an independent run is very, very difficult, and unless the wrong person got in, which i don't think will happen, you just can't do that. all you're going to do is split up the vote and obama would get in and we can't have that

happen. >> there's almost five years you could organize "the apprentice" and "celebrity apprentice" around the next election. you want to make a gamble now? >> there is truth to that and i'll be a certain age which isn't so bad, there are a lot of people older. who knows. we'll look at that. i'm having a lot of fun, i believe in my endorsement. i believe mitt romney will be not only a great candidate but a great president and we'll see how it all works out. >> donald, the super bowl went to the giants. >> right. >> hometown team and there is a parade coming up today. this is good for new york, right? >> it's great for new york, the spirit in the streets is unbelievable. you and i love bob kraft and tom brady, a great guy and great owner and they have great owners, too, the mara, the tisch family, it's great for new york. >> thank you for joining us today. >> thank you, becky. >> always great talking to you

and hope to see you soon. >> good luck i saw the commercials, good luck with "celebrity apprentice." >> we'll have another great season. thank you. bye. >> going through the numbers on coca-cola again and mukhtar kent, the chairman and ceo making comments saying with the results they have once again achieved financial results for the year and the quarter that are either in line with or ahead of their long-term targets. quarterly volume and revenue growth in every one of the five geographic groups showed growth, important for the company as well. coca-cola shares are indicated higher. 68.65 to 69.09 after closing at 6.03 and again this could have impact on the dow, too, or will have some impact on the dow. >> because it's a dow component? >> right, going through with it. any other numbers that jump out at here, michelle? >> the 79 cents is excluding items versus the estimate of 77

cents. >> two cents. >> a slight beat there. >> worldwide still beverage volume was up 8% for the full year, 6% for the quarter. that's an important number to watch, too. >> that's where their growth is, the non-carbonated stuff. >> we'll keep an eye on this, coca-cola shares are indicated higher. coming up, if congressman kevin brady gets his way, you'll be getting a drug test before getting government payments. that's next when "squawk box" returns. an investment guru who is never shy about speaking his mind. our exclusive interview with sam zell, thursday the pepsi ceo will break out the company's earnings and we have a one-hour round table with three squawk market masters and friday, "squawk box" is live from pebble

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checking the futures right now, futures right now are indicated showing that the dow would open lower by about who points, the s&p 500 would open lower by nearly 6 and the nasdaq open lower by nearly 8.5. mining stocks, glencore is buying the 6% of extrada is didn't already own. arcelor mittal, 20 cents, and bhp, rio and mcmoran are all low. >> good to have you here, i know my colleagues want to ask about

other things but does m&a pick up in a big way with the cash sitting there? >> that's the -- >> multi-trillion-dollar question? >> everybody is saying interest rates are down, i mean, i anecdotally talked to private equity people who say the financing market's on fire, there's still a bazillionon companies on the new york stock exchange at 52-week lows but it never seems to happen, worldwide m&a was down 4% last year. january was the worst month in the united states, down 40 some odd percent. europe down 69%. three areas that are hot as hell, mining, tech and pharmaceuticals, all for different reasons, but they're not your traditional m&a i think of from the old hostile days. nobody is going after disney. >> no animal spirit.

seems like all fear. >> and something you know more about than any of us sitting at the table, until greece, portugal and the dominos in europe are set, i think there will be great hesitation in the united states. now having said that, as andrew and i were talking a minute ago, talked to marty lipton about yesterday, there's a change going on in the united states that's profound, shareholders taking a greater interest in the managements of their companies so i think you're likely to see greater shareholder activism. there were six times as many spin-offs last year as in the prior three to five years. there are a number of deals that get done because shareholders open their month, alexander

baldwin and on and on and on. there will be more of that. on paper there should be more m&a transactions way from the three areas i mentioned, the economics were right, p&g there was a great article in the paper that p&g couldn't keep the price of huggies up because they were losing market share and the inflation is under control, so if you're in a u.s. company and you're sitting with the one point trillion dollars worth of cash, unlimited debt market and can't get margin improvement what else can you do but buy deals. so on paper that's what should happen. >> what about the idea of increasing your dividends and giving more back to the shareholders if you can't figure out what to do with the cash, too? >> that's what people are doing. they haven't been increasing the dividend quite as much but share buy-backs are a big deal. >> the history of share buy-backs is littered with problems. >> problems, absolutely. people will tell you small

acquisitions, 50%, 60% success rate, big acquisitions, 75% failure rate, so personally, i am confused, is there inflation, is there not inflation? interest rates have to go up at some time but if you're not getting inflation, interest rates stay down but i do believe and i believe firmly that activism, the pershing kind of stuff i do, and shareholder activism away from the hedge funds will continue worldwide. >> okay. >> we're going to continue this conversation with don throughout the show and we still have to get to ron and we'll do that in a little bit. that's a tease for those in the know. the joint economic committee holding a hearing today to discuss extending the payroll tax cut to more than 160 million americans and it's an issue dividing republican lawmakers and time of course is ticking. congressman kevin brady is vice chairman of the joint economic committee, republican, also

serves on the committee in charge of resolving the payroll tax cut issue. good morning to you. thank you for being with us. >> good morning, thanks for having me. >> i want to talk about if this is going to get extended and what's going to happen. before i go there, to me, oddly enough maybe this is interesting for those around the table. as part of the conversation and part of the conversation about jobless benefits you recently said "it is time to stop subsidizing drug use through federal benefits" and of course there is a big question about whether there should be drug testing for jobless benefits and you say there should be. >> well we do. i think republicans believe states should be allowed to do drug screening especially since so many more jobs require applicants pass a drug test. we continue to hear from employers how many, what they think are qualified applicants are eager to hire them, discover they can't at some point pass that drug test, and so the

reforms we're pushing for which is one you do job search from day one on unemployment benefits, that states are allowed to help you get a ged if you don't have a high school education and that states be allowed, they don't have to at all but we remove the mandate that stops them from drug screening and drug testing, we think these are common sense reforms. >> here is a question, if you have a drug problem, do you think that the state should then help you with that at all? how do you deal with the whole population of people who are not just -- i hear what you're saying but is there some other side to the story? >> well just from the standpoint of states should be able to design plans to get people back to work, whether it's because they don't even have a high school education so they're the last ones hired and the first ones laid off or because they've got a drug problem so they can design a program to get them off there and make sure they are a clean applicant and have a chance for a future. we allow for the first time states to use the same innovation they brought to

welfare reform and apply it to unemployment program because right now, the plan we have in place frankly keeps people unemployed far too long. we want them to get back to work and we think the states have some of the best ideas. >> go ahead. >> i'm just completely confused. what drugs are we testing for, what's the cost of the drug testing? what do we do with people who fail the tests? it just seems that this is apples and oranges and that extend the benefits, help people get back to work, if they have a drug test and want to voluntarily take a test that's fine, enroll in a program but i can't see -- what drugs are we testing for? marijuana is legal in 14 states in the united states. >> obviously tests for the same drugs that we do to test your competency for jobs that require you passing a drug test. but you know, at the end of the day, what the republicans are

saying, let's extend unemployment benefits, let's bring some real reforms to allow people, to get back to work sooner and to allow states again to have some of that innovation. this isn't that hard. some statsz already do some drug screening of their state benefits, so this isn't a big stretch. what we're saying in the federal side of it is that you have to search for a job from day one. we help you get an education and yes, states can, if they choose, can do drug screen. >> you didn't answer my question. if i take a drug test and can't get my benefits extended, what happens to me? >> actually the states will design that program but let me ask you this. if you got a series of drug habits, you really think you're a good applicant for a job? do you think your chance of an economic future for you and your family is very high? should we be subsidizing that or take some steps to help you actually get to a much cleaner we think future. >> that's a -- >> do we have estimates how many

people on unemployment might be using drugs? any good number out there in. >> i don't think there is a good number. i think at the state lovely, there is concern but i don't know what the numbers are. >> you do believe there should be some form of program for people who do have a problem and for example don't pass the test. >> absolutely. >> because critics of what you're saying are going to suggest that this is targeting, if you will, the poorest populations and arguably minority populations, this has a lot of clouds refer to. >> just using the word drugs, what drugs? >> i'm not sure the stereotypes hold. casual users don't necessarily fall in the low income areas at all and i don't know how continuing to subsidize drug use through federal benefits helps them or helps our economy, and if states want the chance, they don't have to, in fact, they can ignore this completely. we're great with that. if they want to put in place programs to help people become

clean and become a strong job applicant, they can. >> what drugs are we testing for? if you're suggesting that -- >> i know you keep asking the question but these are the same types of drug tests people have to pass to obtain jobs. >> when you say drugs, it's so generic i have no idea what you're talking about. >> in the 14 states where marijuana was legal they wouldn't test. it would be contradictory. >> are we testing for alcohol, crack addicts, heroin addicts, where i would agree 100%. >> probably up to the state. >> but testing for some kid who got out of college and smoked a joint, maybe he impaled. >> congressman? >> congressman real quick, handicap the debate on the extension of the payroll tax cut, what's going to happen and i know the big issue is how it's going to get paid for. >> yeah i think at the end of the day it's going to be passed,

both the payroll tax extension, unemployment extension and fixing how we reimburse our local doctors and medicare will be done. how it's paid for is key and today republicans have three proposals that the president has agreed in concept to, that would fund at least half of the expenses of those costs, including stopping fraud in obama care, freezing the pay of federal workers and members of congress and ensuring that those who are a little wealthier pay more of their medicare premiums we think these are pretty good ways to pay for this. >> congressman brady thank you for joining us this morning. appreciate it very much. when we come back we talk iran versus the rest of the world. former energy secretary bill richardson joins us to talk about what's at stake for the global oil markets if military action is taken against iran. market master mohammed el-erian will break it all down.

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we're back on this tuesday morning. the dow would open up a little bit lower, off about 38 points. we have describe disappointing news out of coke cocla this morning? you want to sort it out? >> the stock indicated higher, beat by two cents and the volume looked good. >> well you know. >> wasn't pepsi good? >> the futures were a little bit weaker before we got the numbers. >> we'll give it some credit. >> wasn't pepsi up like 30%? >> we're talking coke this morning. coke and pepsi complicated, confusing. >> coke has been doing very well. >> pepsi does snacks. >> we'll have indra nouye thursday. in the next hour, eye rain and israel's war over words and nukes.

and violence emerging in syria and egypt, all of that up next with former energy secretary bill richardson, joining us live to help us assess the growing threats out of the middle east. and then keeping the bears in hiatus, mohammed el-erian has answers when "squawk" returns with a big hour coming right up. optionsxpress, where you can trade your favorite products, all in one account. keep watch on the markets. or use our exclusive tools to help find ideas. it's powerful, easy-to-use technology for trading stocks, options, and futures. keep trading whether you're at home, in the office, or on the go.

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pressure escalating in the middle east. israel and iran exchanging threats, renewed violence in syria and egypt. governor richards, former ambassador to the u.n. and former energy secretary joins us to tackle this volatile region. account bulls find more room to run? mohammed el-erian of pimco is a squawk master of the market, joins us. and a midwestern governor planning to slash income state taxes, how the state will make up an estimated $350 million in lost revenue. the third hour of "squawk box" begins right now.

>> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm andrew ross sorkin along with becky quick and michelle caruso-cabrera. we have a big show later in the week. our guest host is donald drapkin and founder and chairman of casablanca capital. u.s. equity futures down a little bit, i wanted to correct myself, we had good news out of coca-cola this morning, not bad news. we wi'll talk about that in a s. dow off 42 points, s&p 500 would open 6 points down and nasdaq open about 10 points down. ben bernanke headed to capitol hill today. the fed chairman will be testifying before the senate banking committee that starts at 10:00 a.m. eastern time. speaking to a house panel last thursday he called the economy frustratingly slow.

we'll hear more about that in a minute. today we're also going to find out if friday's employment report changed his characterization at all. he was calling it frustratingly slow, obviously the numbers we got on friday had some economists changing their gdp forecast. economists say it's unlikely we will get a radical new outlook from the chairman today but the market will be watching every word closely. also the republican governor of oklahoma announcing a new plan to cut state income tax rates and eventually phase them out all together. governor mary fallon would reduce the tax benefits from seven to three and drop it from 35. 5.25% to 3.25%. democrat governor fallin will join us atat 8:40 eastern.

unions are on strike in athens again. the video comes as greece's prime minister and the leaders of the country's main political parties are resuming talks today, deciding on whether or not to accept new austerity and reform measures that have been demanded by landers of last resort, the european union, european partners, another 130 billion euros of new loans and glencore and xstrata, a $90 billion deal, largest in their industry. european equities are lower across the board, ftse by 0.6%, the cac and dax as well. the athens composite has been on a tremendous rally lately so. >> it's up. >> it's up. >> it's up by a quarter of a percent today. >> we'll take it. volatile times on the world stage with israel threatening

iran over its nuclear developments and the u.n. failing to pass a resolution against syria and ongoing uncertainty in egypt, libya and beyond and all in an election year back home. joining us on the set, bill richardson, former governor of new mexico, u.s. ambassador to the united nations and secretary of energy. great to have you here on an important day when a lot of things are in the news. i want to talk about what's going on in iran. before we do that i want to show you a clip, the prince was on the broadcast yet with maria bartiromo and he had to say this. ? i think if you give an ultimatum to iran, it's capitulation or accepting measures, they maybe close it because that's a desperate move. we should not use that stage. we should engage and talk with them. even if they close the hormuz straits i think the united states has the power to open it very swiftly. >> governor, handicap what's going to happen here.

>> well i believe that the big problem right now is that iran has put itself in a box, diplomacy has failed, the administration has tried, the europeans have tried, the iranians continue to develop their nuclear ambitions so you have a situation where i think iran is going to continue to suffer. they've got, they have an oil embargo virtually against them, very tough economic sanctions. the president yesterday put some more sanctions on iran's central bank. i think what you're seeing is in syria, iran's client is falling apart. i think it's huge turmoil in the region and we have to watch developments closely. i'm concerned about israel. israel right now has a very tough neighborhood. they've got a new pact between hamas and the palestinians that is of concern that could deter a lot of israeli/palestinian

talks. oil prices are probably going to spike, so you know, this is not a good region right now, not a good neighborhood. >> what is going on behind the scenes in israel? what are the chances they do something? we talked about this window that they think they have before they enrich enough uranium, if you will. >> i've talked to some israeli friends. interestingly it's the political leaderships that are talking about the strike on iran, the security, the military, the intelligence people are very cautious about it, but obviously it's an internal debate. i don't think israel has made that decision. i think the president was very smart in what he said yesterday, basically let's cool things down, let diplomacy continue to work. sanctions are biting. this is what is very much in our favor. iran's middle class is feeling the sanctions, the leadership is feeling the sanctions, and if it stretches into the oil area that

is vital for iran's economy, i think that the real squeeze will push iran to possibly negotiate on curtailing their nuclear ambitions. >> but there's great controversy over whether the sanctions are really going to work and whether israel isn't being more and more isolated. i mean this hamas pact was very bad. there are obviously no friends in the region. the syrian situation is terrible. might not israel act what i would call undercover, like they did year ago, with the tacit rule of the united states but nobody admitting it in. >> i'm concerned about that don. i think everything you said is accurate, but i worry about attacks from hamas, hz, rockets. i think the neighborhood right now for israel, with ejip not being the ally they used to be, i think what we want to do is

pursue the diplomatic track and that is basically sanctions and sanctions are biting for the if, time. you can see that. >> what leverage do we have with israel? >> we're close, strategic alliance. obviously there are elections in israel happening, elections in the united states, the elections in the palestinian territories so it's a very political situation, but we do have, i wouldn't call it leverage we would exercise. we both have to act in our best interests. israel has a right to defend itself. if the united states sends the message as we're doing that we have to pursue the sanctions, let them ride out, i think russia and china have hurt themselves enormously by their veto on syria, so i think our influence in the region is expanding. >> governor, to don's point, this idea of a secret attack, isn't that what's already been happening with some of the

nuclear scientists there or the supposition that's been happening in. >> there's no question that israel has, and any country has to act in their legitimate self-defense but an attack on iran's nuclear facilities would be i think explosive, would be -- >> if you were israel and you're sitting there and you've got all these forces working against you and not a whole lot of support coming from anywhere, what would you do? >> i would let diplomacy work. i would work with the united states. i would continue to allow the sanctions to bite iran, which they're doing significantly, especially now that they're moving into the oil area. this move on the central bank affects oil revenues. i think that iran is going to be seeing its leverage diminish. the saudis have already said that they would make up for the oil if there's a disruption from iran.

iran has no allies within opec in the region. europe is ganging up on them. france and other european countries are put in tougher sanctions than we are. and syria collapsing hopefully, the regime, i think iran has put itself in a very serious box and i would say to our friends in israel, let's let this crack continue. let's see what these sanctions bring. >> and if they don't work and ultimately they have a neighbor with nuclear capacity they turn to you and say what good did that do us? >> well look i think you have to keep the military option on the table. i'm not saying you take it out. i say that what we do now is use the forces of a coalition of the willing against iran, that we use sanctions, that we continue our diplomatic efforts in the region. syria, a major ally of iran, is collapsing. i think we have to watch the situation there.

we have to push for the israeli/palestinian talks. after these elections although don is right, this is a terrible pact between hamas and the palestinians. this is a region that is exploding in so many arenas. >> why did assad at this time have to cut a deal with hamas today? >> talking about the article in the front page of "the times." >> "the times" this morning, why now? the timing seems deliberate, given the rejection of syria and everything else that's going on. it makes me very uncomfortable. >> well i think electoral reasons in ramallah they'll hold elections there, and the political reasons. everyone wants to get elected. so what you have is elections coming up in israel, in the united states, and in palestinian territories and it's got to be tough to do anything diplomatically until those elections are completed. >> let's talk about the elections here in the united states, and what you see playing

out as at this point romney at least looks like the front-runner, although that could change today based on the caucuses that we see in some of the northern states. >> well, i think the president will get reelected narrowly. i think that he will win in some of the western hispanic states. i think the immigration issue, the hispanic voter is going to be key in states like arizona, new mexico, colorado, nevada, i think if the republicans put somebody like rubio on the ticket in florida, that will make it interesting. but i still think the president will get reelected. the economy is improving. foreign policy i think he's handling it extremely well but mainly the economic numbers seem to be going our way, his way and i think romney will be a tough challenge. he is not somebody that can be diminished, and all of this, you know, i was in those primaries, all of this talk about how

primaries divide you and people get mad, people for gget at the end and they come both in their best interests. >> we could continue this conversation, so much to talk about. we have to have you back but thank you for being with us. appreciate it. coming up we'll dig but the coca-cola earnings report with an analyst and bottom line numbers ahead. and pimco's mohammed el-erian will join us 8:30 a.m. eastern time. "squawk box" will be right back. this is an rc robotic claw.

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welcome back to "squawk box" this tuesday morning, a super bowl ticker tape parade. >> they'll find ticker tape later. >> nonetheless, the dow would open up about 34 points off. i was just e-mailed by a viewer who said it's ridiculous to say the market would open up down. >> i agree. >> it would open down. if you're watching, i'm -- >> open up is redundant. >> we do have grammar police who

watch the show and help us out and fix us on things like that. a legal battle between oracle and s.a.p. isn't over. oracle is rejecting an award against its rival in an intellectual property case and instead opted for a new trial, after a jury awarded oracle $1.3 billion in damage, but the judge cut that to $272 million in september after s.a.p. argued the award was excessive. coca-cola out with fourth quarter results, the can. came in with earnings two cents better than the street was expecting. more with independent analyst david silver. the numbers look good on just about every metric. coca-cola performing. what is your take on what happened? >> it's a good number and you're seeing that volumes are keeping up with their growth forecasts. that was definitely a big problem, as the problems in europe and as the problems,

economic problems really around the world really began to really settle down, how was volumes going to react? were they going to see the strong mid single digits we're seeing this quarter and for the rest of the year or were they going to slow down. in north america you saw the 1% gain but overall organic volumes increased about 4% for the entire world. >> coca-cola managed to do that without cutting prices at all? >> they increased prices in north america, during the third quarter increased prices 2% so you're seeing the positive pricing mix throughout the world especially in north america, one of their largest segments. they get more than 50% of their revenue from outside of the united states and north america, but north america is still their largest segment. >> how does coca-cola fare up against pepsi? >> i think they're light years ahead especially in terms of beverages which is all coke does, light years ahead. during 2010 you saw on the end of 2011 you saw that coke, diet

coke excuse me surpassed pepsi as the number two market share beverage in the united states. that's not going to change any time soon. around the world coke still has a sizeable lead in many markets and the markets that pepsi has a lead in, they're really underperforming, pepsi that is, relative to coke, underperforming and not seeing the growth coke is seeing. with pepsi you have the food industry that sets them apart from coke and that's their bread and butter, no pun intended. >> the stock is indicated up about 80 cents this morning. is that a price you'd be buying? >> i would still be buying, full face closure i own the stock, so does some of my family. i think this is a stock that despite any problems in the economy this is one of those recession-proof stocks. they have a good solid dividend, tons of cash on hand that i expect another dividend increase over the next three to six months so i think it's definitely a good buy at this level. >> david, thank you very much. >> thank you very much. >> let's get more thoughts from

our guest host donald drapkin, chairman of casablanca capital and former chairman of lazar. you had a big bat well ron pearlman, made all the gossip columns in new york city. >> former partner. >> 25 years, yes. >> you won. you must feel pretty good. >> yes. >> tell him what he won. he didn't just win a car. he won $16 million. and he won it in like an hour, jury awarded, how long did it take the jury? >> 84 minutes. >> 84 minutes, you were counting each one i assume? >> you bet. when you get up in front and the judge says madam chairman have you reached a verdict, your throat -- >> ron was a very good friend. how did it get to this point? what happened? >> you know sometimes people have falling outs and i can't explain it but it happened. >> that's all you want to say about this? i want to know more. i want to know, have you talked

to him about this? >> nope. >> when is the last time you talked to him? >> actually when my son passed away two years ago. >> i'm sorry to hear that. >> you may have some contractual obligations that prevent you from talking? >> absolutely. >> that explains his sudden closed mouthedness on this. >> don talk go what you're doing now. >> we're doing what we did last year which seems to be looking out well. we're looking at doing other kinds of funds. i can't be more specific than that, because of s.e.c. regulations, but things like event-driven m&a seems to be the place to be today. >> a lot of m&a activity or feels like it's coming back a little bit. >> what you said, we were talking about before, m&a activity in different guises,

special situations, people taking stakes in companies. >> right. >> not so much the stratas or the pfizer buying, lumina, google is sitting on all this money, and those aren't the kinds of m&a transactions that i'm talking about necessarily. but there will be lots more shareholder activism over the next year. >> you also have some strong thoughts about shorts in the market and whether they should be allowed to exist. >> when i was younger, i loved to short the market, because shorts tend to be more aggressive. they do more homework. they try to plant more stories. they just do more homework, and it was very upsetting to me during the lehman era and before as i said on "squawk box," years ago, that the rules were

changed, so that you can get around not having to own the security, you don't have to own the underlying security. >> naked shorting. >> naked shorting. >> i don't have a problem with shorting. i think it's a great way to see the market's there but the naked short something different. >> short something great for the market. it's part of the market, it creates a buying opportunity underneath the stock, you know, the shorts are always carried out in body bags eventually because companies recover or change management, do whatever, but naked shorting can really create a run on the bank, as our co-host knows better than anybody. you know, you can just get everybody gang up. >> right. >> and trust in a company is an important thing. if you see companies dropping 10, 20 points a day. >> you're talking about lehman.

that's interesting. you have another outrage but we'll get to that after the next break. we'll tease it. >> should i tease it? >> we'll be back with more with don with just a moment. when we come back more of today's top stories as well and still to come, words of wisdom from a "squawk box" master of the market, pimco's mohammed el-erian. on december 21st, polar shifts will reverse the earth's gravitational pull and hurtle us all into space, which would render retirement planning unnecessary. but say the sun rises on december 22nd and you still need to retire, td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans? when you open a new account or roll over an old 401(k).

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welcome back to "squawk box." mgm says its lenders agreed to loan the studio $500 million. that money will be used to retire debt that it took on when it emerged from bankruptcy about a year ago. the company also will expand its film and tv production. the s.e.c. finalizing a plan to shore up the money market industry. the two-part plan will be unveiled in the coming weeks. critics say the rules would cut returns. three years ago the collapse of lehman brothers sparked a pannish that threatened savings of millions and that is what the rules are all about. andrew back to you. coming up the dow pulling back by 17 points yesterday. can the bulls find more room to run? we'll squ pimco's mohammed el-erian, joining us next, after the break. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy...

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welcome back to "squawk box." we'll tap into another member of squawk's master class, from the west coast, joining from us newport beach, california, is mohammed el-erian, pimco's ceo and co-chief investment officer

and mohammed, great to see you this morning. >> thank you, becky. >> we've been watching the jobs number, a lot of people have been saying this is a sign the economy is getting better. you look at that government jobs number and think there's something more we need to big into. what is that? >> let's hope it was and it was a really good number, both the 243,000 jobs created and the unemployment rate at 8.3 but if you look at the composition of unemployment, the long-term unemployed, youth unemployment, it suggests there's more to do. it's critical, becky, that nothing be done to interrupt this wonderful cyclical bounce because we want the cyclical bounce to translate into a secular bounce. that's what the markets need to sustain this wonderful return so far this year. >> but you think that there's really something more behind, this is not all the good news that we think it is at this point, that this is really more

concerning? >> it's too early to declare victory for three reasons, one, we have head winds. iran is a head wind. geopolitical risk. you also have europe as a head wind, so it's too early to declare victory because there isn't enough moment toum ovum t overcome head winds. secondly we've gotten here because of liquidity policies. we need a handoff to more sustainable policies and thirdly there's still too many long-term investors on the sideline. they haven't reengaged, so it's great that we've gotten this far but it's way too early to declare victory. >> in terms of the central bankers handing things off the central banks say they're going to be here for some time to come. our central bank says they could be around until 2014 with easy policy. is that something if we give it enough time that it heels itself? >> we should never question especially now after what

chairman bernanke said, the willingness and ability of the central banks to do things. they're both willing and able. the issue is the effectiveness and even the central bankers are starting to acknowledge that it's not just about the benefits, but the costs and risks. you heard chairman bernanke say that last week, what it does to the savers and the pension industry and what it does to the money market industry, so i think the central banks are absolutely committed, but we must not extrapolate that they will remain highly effective. they need help. they are a bridge and they have to be a bridge to somewhere, and so far, the other government agencies are still on the side line. it's incredible to me that we haven't moved on housing, we haven't moved on credit. we haven't moved on infrastructure, we haven't moved on the fiscal side. it is incredible they are on the side lines. >> speaking of inactive government, mohammed, it's michelle here, reuters is crossing with lines saying the greek government is drafting an

agreement on a bailout deal, for political leaders approved later today. i believe it when i see it, but we've been talking for several days about the fact that it looks like we are on the abyss of something in greece and yet the markets, the equity markets in particular don't seem to react so negatively. what is your interpretation of the message of the markets related to greece? >> whether it's greece, whether it's iran, where there's major uncertainty, the market is saying i am not going to price in the risk premium until i have unambiguous evidence that it's gone really bad. in the case of greece it's interesting because we are at the stage where the three parties which are the government, the private creditors, and the public creditors, are trying to agree among them selves. there's a second stage within each group, within each group there has to be agreement once the three groups agree, so this is a very complexish au issue i greece, not going to go away

unfortunately and going to continue to pose a risk to the markets. >> will the market only sit up and pay attention to that every once in a while? does it take a serious shock, we've become immune to what's happening out of greece? >> we have been. we see this movie over and over again and think it can continue going on. look at iran, we've talked to experts, you have, too. most agree the status quo is unsustainable, that israel is running out of patience, that the sanctions are biting on iran. people don't think you can continue the status quo. you say what's the alternative, they say we don't know. its awe 's unlikely to see amer israel and iran to agree to something because there isn't enough confident and trust, on the other hand no single player can deliver an outcome so we end up as a market paralyzed because the status quo isn't sustainable, the other two solutions can't deliver, and we end up rather than pricing the

risk premium that's hard to do we end up saying let's ignore it for a while and see how it develops >> mohammed, are you worried, donald drapkin is on the set and we were talking about lehman brothers and what happened there before. are you worried we could become complacent? we saw the train coming down the track on lehman and we see the train coming down the track and we decide the day will be fine, no problem and yet the train gets derailed and that to me at least selfishly is my worry. it's not yours? >> it is a worry. i think the difference with lehman is that the central banks have become much more proactive, so the liquidity windows are there, the ltro is operating. if you're worried about a lehman moment defined as a complete stop to the payments and settlement system which was really damaging in the fourth quarter, then i think the central banks are prepared to

try to minimize that risk. >> even if greece is disorderly? >> even if greece is disorderly, they will flood the system. you'll see more ltros, et cetera. however there's the economic implications, right, of that, and that's different. for that, we haven't as yet got enough cushions, fiscal deficits are way too high already, interest rates are at zero. if you define the moments as a payment and settlement system, lower risk. if you define it as the economy being able to take a shock that's a higher risk because we are in a worse place than we were in '08. >> my question is, i've heard all this, i agree with 99% of it, where do you put your money? >> well, this is where you've got to have a few principles, right? and we would cite three in particular and i'll tell what you that means in terms of asset allocation. one is prudence, prudence is important here. second is patience. you will have a lot of

opportunities as these things play out and third is optionality. don't underestimate the importance of optionality, so in a typical asset allocation at today's valuations, whatever your equity weight is, you want to be under weight. you want to have selective commodities. you want to have gold and oil because of the geopolitical risk in your portfolio and on the bond side concentrate your exposures seven years and within because that's what the fed can secure in terms of the yield curve. be careful of athe long end of the yield curve which is much more vulnerable and then wait. as you get more information, adjust your position accordingly. >> mohammed a personal question, you were born in new york but you are of egyptian heritage. as you watch what's unfolding in egypt, what is your assessment? must be personally tough to see what's unfolding? >> it's sad to see every night on tv what's going on in the

streets. i think that we have to understand, michelle, that revolutions aren't a discrete event. they are a process, and at some stage, a revolution like the one in egypt has to pivot from dismantling the past to building the future and that's a a really hard pivot and egypt is right now navigating this pivot. it's not an easy one. it's certainly not an orderly one but i'm pretty confident that over time they're going to get it right. >> that's hopeful. that would be wonderful. >> i'll take that to the bank. >> mohammed, thank you very much for joining us. always great talking to you. >> thank you, becky. coming up, a midwestern governor with a plan to drastically cut state taxes. governor mary fallin will talk about her plan to simplify the tax code and how the state will make up the estimated loss of $350 million in revenue. "squawk box" is coming back with that right after the break. coming up on friday, he's good.focus is on pension plans,

retirement plans, states are worried they're not having enough to pay out some of the employees some of the promises they made over decades. as a result it's got a lot of lawmakers looking for closely at what they're doing themselves. there's special programs for legislators. "usa today" did ap. investigative series looking at the perks and plans for legislators only. you wouldn't believe the anger we get from the e-mails, congress should not be passing any laws they are not bound by and shouldn't tell us what health care plans we have when they have the special health care plans. nine states are looking into changing and cutting out the loopholes for just the hisotaianyou sholdf1 time. change? congress of insider trading, what happened to that. >> some of the legislators and governoring who are saying hold on a second, some with the express goal of the constituents saying we want cuts in spending so clean your own house first. they point out governor nikki haley, allows you to be working, drawing a pension and tryingo uttoth ty vef1 ifoueathprpus you 400 million some odd active daily users. >> i have a facebook account i don't use very often and i thought the 800 million was exaggerated. i heard the 400 plus million that's a lot of people who check in every day. >> you would think an active if youhad sionpofy shared it through facebook that counts but you may never go to facebook.com and you're an active user. >> i understand you're using the platform but if you're an investor thinking this is a way you to monetize the users to get an ad next to them. >> you can't put an ad next to rsu tveo neheyo company eventually, you assume they're going to grow over time and transparency and maybe if they deem investors really want that metric and that helps them out, they do it. >> did you get a sense what difference there is between those two numbers? >> hard to tell. by their math they're off somewhere between about 40 site.o 1 arerobabl40ilono to the site at all. >> you're talking about a number

north of 400 million. >> absolutely. >> geez, that's huge. >> we could be talking about 100 million people who disappeared from their numbers so there is, you know, even if i told you 40 million people. >> what i don't understand is 400 million wy n'yoju reedsers soth we o1 o tryg w game, e o 1 the question is whether they should make a distinction or put a definition on page one. the problem is if you look through the first couple of pages you would never understand what they mean by active users. te 00 a.m. and watch >> this was fun. coming up we'll play "let's make a deal" with donald drapkin, casablanca capital will be our guest host and then exclusive club, every guest wants to belong but only a select few are invited, the squawk master class, today inducting a new member. here's a hint, he oversees $400 o wl ?ts under u o veps his punches jooirkz . donald times two. first billionaire, donald drapkin is our guest host today. >> are we ready? >> then the donald. trump joins us live to discuss the mitt romney endorsement, the trip back to the board room, and more. and from master in training to master of the universe. >> i am iron! >> we'll be inducting a new squawk markt st. begins rghno

welcome back to "squawk box." oklahoma governor mary fallin is hoping her new tax plan will take the sooner state to new fiscal heights by reducing the state income tax. here to explain is governor fallin. good morning. >> fallin. >> i'm looking at the conservative playbook, what a lot of people hope for in the conservative party it would be what you're trying to do here which is eventually eliminate the income tax but in the short term go from a lot of tax brackets to just a few, correct? >> absolutely. one of the things we're trying to do in oklahoma is to create a fair, lower, flatter tax rate that is simpler for oklahomiaok to operate in. the states that have lower or no income tax have the fastest job growth rate and also are the best performing states in the nation especially during this economic downturn.

we know that there was a study done that said 59%, there was a 59% growth in states that had no income tax or low income tax versus a 38% growth in states that had higher income tax, and certainly that correlates with job creation. what we're proposing in oklahoma, we're going to introduce our income tax rate from 5.25% to 3.25% and on down to 2.25%. if you're a couple making 0 to 30,000 you'll have no income taxes so that way we help the lower income people, from 30,000 to 70,000, you'll pay 2.25% and from 70,000 up it will be 3.5%, and one of the things we're trying to do is to also make sure that we don't starve state government that, we protect the poor and help the middle class. >> what do you think the impact will be on revenues? >> the impact on revenue the way

we'll pay for this, i have three ways to do this, we're going to eliminate carve-outs, loopholes, tax credits underperforming and exchange out for lowering the income tax and in some cases for people who will pay no income tax that at the lower income tax bracket and secondly continue to do what we've been doing, focus on eliminating government waste and making more efficient and effective. we consome lated our i.t. services, we're focusing on energy efficiency in oklahoma. >> does that get to you break even w more revenue, less, what? >> it is budget neutral at this point and of course as you focus on years out, we hope to gradually lower the income tax even more by a quarter percent, each year, until hopefully the income tax is eliminated, but we've also built in a safety net, a 5% growth trigger, so if our nation should go through a national economic downturn there's a safety net there for

us. >> if it's revenue neutral right now and you eventually plan to have zero income tax, how do you pay for state government at that point? >> the other third point i want to mention, too, with he believe our economy will continue to grow. right now oklahoma is seeing double-digit revenue growth, unemployment rate is 6.1%, one of the lowest in the nation. we've also reduced $6 billion out of our unfunded liability of our pension system so we believe that if we do the right things to create a better business climate, that we're focusing on lowering the tax burden on our citizens, making government more efficient, more modernized. >> can i clarify the one thing, when you totally abolished, are you talking right now for people under $30,000 or everybody would eventually not have to pay income tax like the state of hasment ham for example? >> we hope in the end over a period of time, and that's based upon how the economy is doing we'll abolish the income tax all

together. >> where does the money come from? in new hampshire they have a sales tax, property taxes. food tax, exactly. is there we wi . >> we'll have our corporate taxes, excise taxes and motor vehicle sales tax, gross production tax, lots of other sources of renew for our state but as i said we get a safety net built in there based upon the economy and how we're purchasing. >> what percentage of your state tax dollars or your state revenue is coming from the income tax right now? >> close to about a third. it's $1.9 billion out of a $6.6 billion budget that we have in our state, and of course that's why we're gradually going to be lowering these income taxes. but our tax cut will be effective january 1st if my plan goes through and it will be immediate and it will help oklahomans. >> governors of new jersey -- >> a side conversation here.

tell me about the cost of government in your state and whether or not you've been able to move government workers from defined benefits to just defined contributions. >> well we haven't done that yet but we're certainly looking at that, and that is something that we have to hope to continue to pursue but i will tell you this past year we passed over four pension reform bills in the state of oklahoma. we had a $16 billion unfunded liability in our pension systems, and in one year, in fact, six months actually, that we were able to reduce our unfunded liability by $6 billion, just by the reforms that we passed, and a couple things we did, we did increase the retirement age on some of our pension funds. we also said that we weren't going to have automatic c.o.l.a.s, cost of living increases, in our pension systems, unless there was money to pay for it, smart, prudent budgeting. >> this is what a lot of people like to see happen on the national level when it comes to a republican candidate and what some would hope would be

eventually a republican presidency. how do you see the state of the republican race when it comes to the presidency? >> i think it's been a heated spirited debate on the shall us important to america. i'm glad that on the republican side we're focusing on jobs and the economy. that's what people want to hear. i think they want to hear how we're going to restrain and bring back in spending in washington, d.c. >> who do you think should be the nominee? >> i'm not endorsing anyone right now but it certainly looks like governor mitt romney is doing well right now. >> you'd be happy with that, comfortable? >> you know, one thing i'm looking for in a candidate is someone that is going to focus on right-sizing government, controlling spending, certainly working towards policies that will create a better business environment for our nation, someone who will not hurt businesses but help businesses, and someone who has integrity, someone who is trustworthy, and someone that will work hoaard a

be strong on security and national infrastructure. >> governor, it's a pleasure. thank you for joining us. >> thank you, a pleasure to join you, too. coming up the you for havin we're going to head to the new york stock exchange. that's coming up next when "squawk box" returns. tdd#: 1-800-345-2550 like a lot of things, the market has changed, tdd#: 1-800-345-2550 and your plans probably have too.

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welcome back. let's get down to the new york stock exchange. melissa and jim -- >> i'm happy. >> and you're sitting in his seat this morning. >> please do. did you get a new haircut? >> i did, but a couple days ago. you hadn't noticed.

>> very high and tight. you look very good. >> why? >> engagement is an issue that everyone kind of fudges, but their fudge is better than everybody else's. i think that facebook is the way people get to games, facebook is the way that people communicate, and they may just prell the "like" button, but that's more than the other sites. >> isn't it reminiscent december i don't want to say there's any likenesses to the boom, but reminiscent with the times that people came up with metrics that didn't previously exist to try to persuade investors what they have to sell is worth something. >> when you move over to mobile, people will not pay, and they

don't have mobile, and people saying that's the greatest thing that will happen with them. it sure wasn't for google, andrew. >> jim, that number was a little misleading. i assumed it was people going to facebook.com and locking in. apparently there's not a huge difference between that and the number they just gave. >> that's probably a fair point. >> i would like to see them doing both. anything special? >> glencor extreada. is this the biggest merger i've never seen anyone not care about, like coinstair/verizon.

>> do you care about it? >> two hours ago i did. >> you've moved on? >> the news cycle is very short. >> we will be watching what you have to say, and i will be glued to the tv. >> see you guys in a couple minutes. coming up final thoughts from our guest host. "squawk box" will be right back. tomorrow our exclusive interview with sam zell. and we'll talk economics and politics with austan goolsbee, former economic adviser to president obama. tune in at 6:00 a.m. eastern tomorrow.

so -- tell me again what happened. i was downstairs making coffee, and we heard it. it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this? maybe. i just sorta threw a little money here, a little money there. and i loaded up on something my dentist told me was hot. yeah. ♪

hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too.

[ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business. the stock of the day, coinstar, the company earned a dollar a share, swamping estimates of 64 kroents. the big plus, growing revenue from the redbox dvd reasonabilitial business, also made upbeat comments about 2012. don shall it has been fantastic to see you. we've had a lot to talk about. there's been a lot goin