cnbc. and scott wapner, good morning. scott. >> you brought your gavel. >> yeah, i did. >> did you, really? >> yeah, i did. with bell and gouldsby, they're not here to fight each other, but -- >> they do like to talk, but i may have to bring the gavel down and get order in the house. >> have you ever been here with the gavel before? >> not when i was here. when i was out. >> you never know when it's going to be needed. >> we appreciate that. >> we're going to need it today, for sure. >> we are. we're going to talk a lot about what happened last night with some of these primaries and caucuses. we're going to start things out with greece. one deadline has come and gone. and the leaders are meeting yet again today in the event to try and strike a deal in return for another bailout package.

now, these delays have prompted some eu leaders to warn that the euro zoe can live without athens. we'll see who blings first been it's a big game of chicken. once again, big concern out of greece and the market seems to be shrugging it off. >> why is it shrugging it off? can i just ask the question? >> i think we assume that the deal is going to get done, right? >> probably. >> why do we assume that? >> i don't know. andrew, i have to say -- >> every week that this happens, i say to myself, maybe i'm wrong. >> well, it has to get done. >> i understand that. >> they know it has to get done. it's going to be a messy process getting to the endpoint. >> does that appeal to you a little bit? >> yeah, but a little bit more serious. >> i think when you throw politics into it, you could see things blow up and fall apart. at some point, they say forget it. if the austerity measures are this much, we'll go it ourselves. i think there's a risk.

and i've been surprised that the market is so complacent about it. maybe it's because we're sick of it. i have been surprised that the markets have been so complacent. >> i don't know. i just remember when i was in dallas two weeks ago and we came on the air, there were a number of eu officials, everyone said we're having a deal today or over the weekend, on the record, on camera they were saying this and, of course, we went on camera and we said, they said they were going to have a deal. we put a caveat in there a couple on times, right? >> scott, michelle has made the point that they have to do this. if your lender of last resort disappears, you'll pay much worse situations. but i think once politics gets involved, at least from my perspective, sometimes you do bite off your knows to spite your face. >> and that's probably why it's dragged on as long as it has because the politics have gotten involved. but at the end of the day, i think they know they have to get a deal done. the market expects there's going

to be a deal. >> you have another story. >> this is like the other story that doesn't go away. >> i was looking forward to talking about this story with you and that's our corporate news this morning, yahoo! chairman roy bostock and three other shareholders are stepping down. yesterday's departures are the latest piece of a drastic makeover of the company's leadership. yahoo! hired former pay pal executive scott thompson as its ceo. then yang resigned from the board. shares of yahoo! if we take a look here, basically a fractional mover. don't you think that the only reason thompson took this job is because he said, look, i'll take this gig, but you guys are going to clean out house because i'm not running the ship with these guys on the ship? >> i do think that. >> i wasn't going to go there. i thought that this was all part of a piece.

it was all one -- i think that when they were going through the recruitment process, the feedback that they got was nobody was going to take this job with the current group. i also think dan lobe, third point out there, you have all these other angry shareholders. the chances of bostock and coe staying on the board were going to be slim, anyway. i think you had to do this and i think this was sort of in the cards from the beginning. >> it was. that was part of the discussion along the way, that you're looking at different boards members comes in. >> but the question is, was it the new ceo who forced them house? >> i'm not saying he forced them out. i'm simply saying he took the job with them going out. saying, listen, i'm not going to take this gig and run it with yang and bostock in the fold. why would you do that? >> interesting that yang went

first, though. i would have thought maybe they all went together. >> maybe a symbolic move. >> the question is, if you're dan lobe and the stock is at 15 bucks, you haven't made that much mope yet. is it a stock that's worth $20 or $22? now do they sell the asian assets? what are they really doing? and that is something i'm not sure that the new board will know. what do you think? >> my personal sense is that this is a lost cause. >> so sell now? >> i think the street has thought that for a while. cramer says, no social, no mobile, no cloud when it comes to yahoo!. really, what do you do? >> i still have a yahoo! address. >> you do? >> i do. >> why? >> they have a lot of active use users. >> i have a facebook account, too, but i use yahoo! a lot more than i use facebook. >> bigger question, is facebook going to become the new yahoo!?

meaning is there always something that comes next? that's my worry. anyway, in other news this morning, morgan stanley and goldman sachs clarifying interesting compensation policies. the firm saying for the first time that managers are at risk of having pay taken back if a trader under their watch engages in excessive risk trading. "the wall street journal" indicating that the company disclosed the companies separately in s.e.c. policies. the moves were in agreements to end proxy moves by john liu who was calling for the policy to be strengthened. that is pretty interesting because you thought it was going to be just on the trader who was making the bad bet. but also, i have to read this more closely, where in the scheme is it? if i'm your manager, am i on the hook? but if i'm the manager of the manager, right? >> it makes sense if it goes all the way to the top because that's the only way you get control on things. same thing with sayre baines oxley, to force the ceo to sit

down and sign, yes, i have sat down with these practices and looked through it. the only way you get real accountability is the guy at the top because that's where the buck stops. >> what i'll be looking for in a year or two or three now is whether there's a callback on anything. >> whether it comes out that way. this is a blpt for how that could happen. whether it's put into practice. and sar baines oxley wasn't used to put any -- >> have we heard of any callbacks yet? >> i don't think so. >> just on a bad trade. that's the other thing. if you make a bad traig trade -- >> maybe if you're a rogue trader. >> if you make a bad trade and the rest of the firm has a bad quarter, are they calling you back? >> i haven't heard of any. >> i don't know. >> so, anyway -- >> but i do think it's the right blueprint. whether it gets followed or not is a good question. also, we've heard about another potential broad mortgage

settlement with a major bank that could be announced as early at tomorrow. negotiators say a federal state servicing settlement has the backing of 40 states. but so far, it lacks the support of a handful of critical states, including california and new york. new york attorney general eric snyderman had planned an announcement late yesterday, but postponed it indefinitely without explanation. we have a relatively quiet day on the economic front today. there's two reports to watch. first of all, the mortgage bankers association released its mortgage associations. that survey comes out at 7:00 a.m. eastern time. as for earnings, well, that will be a little busier. we will deal with a handful of companies before the bell, including cvs caremark, moody's, print and time warner. moody's will be reporting after the close today, as well. disney was out with results last night. the company reported better-than-expected earnings, but revenues fell short of

estimates. ceo bob iger talked to our julia boorstin. >> we had real strengths led by the disney chan and espn. we had a great quarter at our resorts. and i think in general advertising was relatively strong for the quarter. and i think it says a lot about the five grand, the prize of the company's businesses. >> and we'll talk more about disney with a media analyst in about ten minutes. > >> caesars sells 1.81 million shares at $9 per share. the company was hoping to raise much more money two years ago. apollo and tc capital took apollo in 2008 in a huge leveraged buyout. >> november 2010, they were supposed to come out and looking at almost $15 to $17.

>> i still think we need to show that clip from hangover. but, you know -- >> you know what i'm talking about? >> yesterday he brings us this clip from home -- you saw the movie, right? >> yes. >> loved the movie. andr andrew, try it out. >> it's funny, but i'm a bad actor so we're not going to do it. calcers pressing the company for a bigger and more diverse board. the second largest fund says it's disappointed there are no women on it. there's issues about control. mark zuckerberg is still controlling 50% of the company. and when facebook does go public, zuckerberg's shares could be worth $128 billion. that amount will be treated as

salary. zuckerberg will end up having a tax bill of more than $2 billion. but he likely will sell enough stock to pay that bill. now, today's "new york times" therein an op-ed worth reading. it discusses how much tax zumerberg will pay on his rest of his stock that he won't immediately sell. he need not pay any. instead, he can use his stock as collateral to borrow against his tremendous wealth and avoid all tax. that's what larry ellison did. another option is that if mr. zuckerberg never sells his shares, he can avoid all income tax and then, on his death, pass on his shares to his heirs. when they sell them, they will be taxed ohm on any appreciation in value since his death. steve he jobs is a member of how this works. steve jobs never sold the shares. his wife will be taxed on the additional incremental value created post his death.

so meredith compared zuckerberg to lady gaga. she's subject to the highest income rate. she's likely to pay $145 million in taxes this year. that's infinitely more than zumerberg will pay because of the taxes being based on the concept of relation. this is what is so interesting about the fees. miller is now arguing for a mark to market taxation system on the top 1% -- >> traes crazy. >> of -- >> it's crazy for a couple of reasons. first of all, okay, great, if you never sell anything and you never use it, then you don't have to pay the tax on it. which, okay, there aren't too many people out there who are actually going to do that. you can point to steve jobs as one of the few examples that this ever happens with. but lady gaga has $90 million that she can use tomorrow. >> it's realized money. >> realized money. and what happens if the stock collapses after that and you're

left with a huge bill? >> isn't zumerburg going to be the largest tangs payer of -- >> because he's selling the shares. >> so just take and use him as the poster child for what's wrong with this country when he is the single biggest check writer to the u.s. treasury in history. >> right. the argument that miller is making is that if you look at the top -- and i don't even think it's the 1%. maybe the 0.01%, that if you are bill gates or warren buffett or name somebody who not just has $1 billion, but $5 billion or $20 billion, the chance of any of that mean ever being reali realized, right, is minimus, in part because they're going to be given away to charity, which is a noble effort, but it's not a taxed effort. >> but if you give the money away and you never touch it -- >> i agree. they're trying to figure out how

do you tax the value created. >> but what if you pay a tax at the high water mark and then the stock collapses and you never get it back. >> i read the piece and by the end of the pea piece i was saying, well, what happens if you do this, what else if you do this and what else if you do this. >> it's an interesting concept. >> it's an interesting concept. >> and there are a million things wrong with the tax policy being set up to benefit the richest people in america. i agree with that, too. but the idea of paying a tax on something before you realize the gains on it -- >> so the question then is smoo should the company somehow benefit in any way from the enormous value that's being created, even if it's not realize realized, if you will? scott, your view? you don't even want to go there, i can tell. >> should the country benefit? >> why don't you just change the

realized gains at the end of it. instead of having a mark to market system where you pay based on what could be a high water -- that seems crazy to me. if you want to change the realized gains for the errors who did nothing to create this wealth and are then getting some massive windfall at the end, i could see an argument for that. >> i didn't understand this about tax policy. is it absolutely true that if you pass on shares -- >> i didn't realize that. >> and i would have thought you would lose 50% of et. >> i don't know the tax policy behind that. that seems crazy to me. if that was the case, i'd say adjust part of it and don't let that be the situation where you're paying on the realized gains on the death of someone. this is why china fixed the tax code.

if you are a tax accountant, why don't you e-mail us and weigh in. >> but it does seem crazy to me to pillory somebody who is going to be the single largest taxpayer ever in american history by writing this check. >> i am with you 1 hup%. >> yeah. the thing that -- >> the issue is more -- >> the times had an interesting article about how google is going to -- or how facebook is going to be able to benefit from zuckerberg's tax payments and be able to take it as a write youp. and that seems crazy to me, too, that the government is not going to get some benefit out of this because he's paying taxes that the company will no longer pay. that seems a little crazy to me. i think that seems insane. the idea of paying taxes at the

high water mark seems crazy to me. >> i'm with you 100%. we shall all hold hands. let's do our global market report now. ross westgate is standing by in london. good morning, ross. >> hey, scott, good to see you. markets seem a little bit firmer, wages to the upside on the back of two days of very flat movements for european stocks yesterday. the ftse 100 just down 6 points. the dax down around 8 points. right now, you can see advancers outpacing decliners around about 6 to 4. a little more than that on the dow jones stoxx 600. the last time we looked, just up 15 points. the xetra dax up 0.75%. the cac 40 up 0.5 pefrs. biggest moves comes from the ftse mib, up 1.5%. we're inching towards the sense of the market on this side of the pond. we hit the best levels for

around about two months, 1.3288 we hit on euro/dollar. it narrows the spreads again this morning between italian and spanish debt. german bund yields for a while nudged up around 2%. below that, back down to 1.97% at the moment. ten-year btp is down about 5.6%. those yields are spread and it's the narrowest we've seen since early october. we had the big blowout again in october. so sentiment is generally improving. we had a syndication for spanish debt today. the first time they've had a syndication of debt since nearly a year ago. it's suggested that there's more improved sentiment amongst european debt. they keep moving in the right way. the latest things will be focusing on greece is one of the other sidebar discussions. the imf has been pressing the ecb to take a hit on its holdings of greek debt. they've been exchanging debt

below the face value. they wouldn't necessarily take a loss on it because, of course, they bought it below face value in exchange for funding. so that is where we stand at the moment. back to you guys. >> thanks so much, ross. rick santorum this morning turning in three big wins yesterday. john harwood joins us not from my of those three states, but from florida. john, it's good to see you this morning. i'm thinking colorado, minnesota and missouri, takes all three. and a couple of them he wins big, santoum does. how does this change the race? >> not fundamentally, i don't think, andrew. look, mitt romney is still on track to be the republican nominee. but this was an embarrassing night for him. his numbers were very weak. he was beaten two to one by rick santorum in minnesota and missouri. missouri was an interesting test case because newt gingrich was not on the ballot. he hadn't qualified. so santorum had a more or less clean shot at mitt romney. it was a low turnout event.

no delegates at stake so the romney campaign says, we didn't try. we didn't try to play. but what this shows is that there's not much underlying ambient level of contentment with mitt romney as the nominee. in a case where he didn't try very hard, but he's facing an opponent, rick santorum who doesn't have much of a campaign in most cases, rick santorum cleaned his clock. it's something that helped rick santorum stay viable in the race, extend his ability to compete. not good for newt gingrich, but one of the things that we've seen in the race, andrew, is that momentum has not really transferred state to state. rick santorum wins iowa. didn't do anything for him in new hampshire. newt gingrich won south carolina. didn't do much in florida. so we have to see what happens. but i think the headline story is weakness for mitt romney. >> if newt were to get out of the race and you just put mitt and santorum next to each other,

what happens? >> then you have mitt romney marshalling his resources, the super pac and mitt romney's campaign would be after rick santorum big time and probably be able to overwhelm him with money with the infrastructure and organization of his campaign. rick santorum's campaign told me last night, john braybender as chief strategist is what this night tells me is that if we get a one-on-one shot as we did in missouri, we can take out mitt romney. i'm skeptical of that. but it at least raises the possibility, the plausibility of that scenario. the problem is, how do you get to a one-on-one matchup? who is going to tell newt gingrich that he's going to get out? he sees mitt romney weaken and says, i can go compete in arizona, for example, which votes late in february alongside michigan which is going to away homer for mitt romney. you don't really have either of these candidates in sanatorium

or gingrich with much incentive to get out of the rate race and make easier for the other guy. >> obama's rates have soared likely that he gets re-elected. part of that is the jobs number from friday, but part of it has to be this chaos in the republican party. you still have four guys who are in this race. >> yes. and i think the weakness that romney is showing is one factor in that. the lift that the president is getting from improving economic news is another part of that. and barack obama is kicking full bore into campaign gear. we saw his announcement yesterday that he and his surrogates are going to encourage their donors to give to the super pac. which has been lagging throughout 2011. they were dwarfed by the amount of money that republican super pacs were raising. but the fact that that money wasn't coming in over the transom led the white house to

say, okay, we're embracing this process. we have been decrying the influence of super pacs and the citizens united decision. but that is the game that we've got and we're going to play. they're going to play aggressively. and the odds for barack obama certainly looking much better than they were a month or two ago. >> john harwood from tallahassee, florida, thanks for being with us and you're looking good. you're looking like you're feeling better. that's a good thing. >> i am. thank you very much. i'm very well recovered. >> we're thrilled to have you back. john, we'll check in with you again soon. when we come back, toe, it's the happiest place on earth. >> right here? >> right here. >> on "squawk box." >> not so much. you know what this is. but is the house of mouse putting smiles on investors' faces this morning? first, though, college sports buzz. reports suggest that the big east conference will officially welcome a new member school today, memphis. the tigers will join the big east for the 2013 and 2014

season and compete in all scores. that's just, by the way, would be the fourth conference usa school to jump to the big east along with houston, central florida and smu. that's music to wake up to. right now as we head to a break, check out the global markets headlines. "squawk box" will be right back. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want.

ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪

welcome back to squawk. u.s. equity futures, we're going to open a bit in positive territory. we are a few points above fair value across the board. i love the music, too. making headlines, getting heckled from the set. halliburton plans to stop issuing blb to employees. the services giant will switch over to apple iphone saying it's better suited to its needs. >> thank you, judge wapner. appreciate it. disney reporting mixed results after the bell. the revenue numbers fell a

little short. joining us now to talk about it is david bank. david, the stock market looks like it was a little disappointed by this, the idea that revenue came in below expectations. what caused that revenue miss? >> the revenue miss was largely driven by the studio. and the studio is a -- it's a mixed blessing in that when you beat on studio, you tend really not to get credit for it. you had a hit movie, but who with knows if you're going to have a hit movie again. but when you miss, people tend to focus on it. the majority of the miss i think on the revenue arm was really about the studio. but the flip side of it was that the beat on earnings, the majority of that came from improved margin at the studio. so i think people looked at these results and said, what exactly is going on here? they would have been better off kind of not beating at the studio because the core numbers themselves, the parks were better, occupancy, traffic, revenue per room, all those

things at the particles that people are looking for, they were good, they were in line. the espn advertising, the affiliate fees, all that stuff was pretty good, too. so it got a little lost in all this what's happens at the studio. >> iger was on with julia boorstin at cnbc. he pointed out that people are spending moreç tt park. they've been able to raise prices on food and things that they sell there. i would think that is good news. >> the strategy that disney has used to decrease its promotional spending in order to drive pricing. and take the risks that occupancy and traffic might drop. and it really hasn't happened. the departure has been great and they're raising prices. so i think things are -- you know, things are going really well there. to me, the biggest thing that's happened to this stock really in the last month hasn't been about this quarter. it was about the long-term deal

they did with comcast that was announced in january. they locked up for ten years the future of, you know, revenue stream at is he pn on the affiliate. there's a lot more visibility. better to manager that ten-year nfl deal. we think that's a positive. >> was that positive for disney and for comcast or was there one side that really came out on top here? >> well, look, i think everybody gets more visibility in a challenging environment. you know, my guess is that for come kaftd, they get more -- they get more content to utilize in different ways on a tv everywhere platform. but to me, frankly, it's probably better phenomenon disney in that, you know, there's a lot of people running around out there concerned about things like, you know, are we moving towards ala carte pricing for disney, for espn and the rest of the cable states? and i think things like this give you more visibility, more confidence that the basic package will remain intact all

the time. >> david, the stock yesterday closed down i think just over 2%, 40.98. it's unclear where it's going to open. the bid is at 423. the ax is at 426. what do you think is a fair valuation for this stock at this point? >> to me, the question isn't about earnings, right? which is why i think the stock didn't do that much. the issue for this company is multip multiple. over time, is this a bed of breed media company or is this a best of breed brand company? and that's the different between a 15 times multiple, kind of a mid $40 stock or a 17 or 18 times multiple. and that's, you know, what execution is going to demonstration, i think, over the next 12 to 24 months. >> but you think in any case, this is a stock that's worth more than it's trading right now? >> yes, absolutely. >> david thank you too much so much. we have a live report for

greece. why today could be the day for a debt deal or maybe not. as we head to a break, take a look at yesterday's winners and losers. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture

on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. but we couldn't simply repeat history. we had to create it. introducing the 2013 lexus gs, with leading-edge safety technology, like available blind spot monitor... [ tires screech ] ...night view... and heads-up display. [ engine revving ] the all-new 2013 lexus gs. there's no going back. want to protect the house. right. but... home security systems can be really expensive. so to save money, we actually just adopted a rescue panther.

i think i'm goin-... shhh! we find that we don't need to sleep that much. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more. should we be letting him p-l-a-y with our t-a-b-l-e-t? [ mom ] i think it's fine. it's the new element from at&t so it's w-a-t-e-r proof. cool. what else does it d-o? it's fast. it's 4g lte. what's l-t-e spell? nothing. w-h-y? hey, can we stop spell talking now? ok. a-y. [ male announcer ] buy a waterproof pantech element for $249.99 and get a 4g burst smartphone free. only from at&t.

sadly, no. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business.

welcome back. one deadline after another has come and gone in greece. cnbc's julia chatterly joins us live from athens with the latest. julia. >> thanks very much. well, we are still waiting for a decision on the agreement here from the reform agreements from the greeks here. but the focus really has been on something different. one other piece of the puzzle, the bailout puzzle that we're trying to work through. and it's been about the psi, the debt write-down. it stems from the "wall street journal" article that we got last night in your time that discussed the fact that the ecb may be ready to make concessions on their holdings of greek debt. this is called the osi, the

official sector participation in this deal. which subsequently had the esf announce that they are likely to play a significant role in both the bailout and in the psi, the debt write-down deal. so that's the latest on that element. the deadline for that is february the 15th, just to keep in mind, and that's when the draft agreement on the debt write-down needs to be presented. at the same time, i'll bring it back to coalition leaders. they are now in possession of the draft agreement of the default and have been since about 9:00 a.m. this morning. they will now be discussing that over the next few hours. we have a tentative meeting time of around 3:00 p.m. athens time. but, of course, as you've seen over the last few days, these things are fluid. we're also expecting we may get a statement at the end of that meeting, we may not. we've heard one source on the ground here suggesting that if we get an agreement on these reforms in the next couple of days, the parliament will hold

an extraordinary meeting on sunday in order to get this passed through. so another piece of the puzzle that is seemingly coming together. in terms of the details, though, that we're getting or we're hearing on the ground here of this agreement, 22% cuts to the minimum wage, which we heard earlier in the week, but now corresponding cuts, too, to the unemployment benefits when you're talking about a couple with unemployment pushing 20%, this is going to be very hard to hear for the population here. we continue to wait and we'll keep you posted with details as we hear them, andrew. it's back to you. >> thanks so much, julia. joining us now, julia callow, chief european economist from barclay's capital. it's good to see you, jewulianj this morning. it is kind of like groundhog's day. every time we think there is a deal, there isn't a deal. we were just talking before you got on the show about the fact that we think they need to come to a conclusion, that they know they need to get there, but then

we raise the question, is it actually possible they don't? so i'm asking you. >> yeah, it is possible. it is possible that, for example, the greek parliament may not approve the package that's being demanded of detroit. there's amounts of hoops that we still have to go through. but the really big problem out there is that under the current proposal, the greek government debt to gdp ratio would still be well above 100% for the next ten years or more. now, i think back in the private sector investors into the greek market, you're going to have to be aiming at some kind of debt to gdp ratio of 50% or 60%. and we're a long way away from that. so in the meantime, the debt is still accumulating significantly for greece. at the same time, the economy is worsening. you know, just this morning, we were looking at employment in greece and we were looking at how many jobs have been cut in

the public sector in greece and how many in the private sector. and i think it's a very interesting statistic. since the peak, which was in the second quarter of 2008, the number of private sector jobs in greece has actually fallen by about 450,000. whereas the number of public sector jobs, according to the numbers we were looking at, has fallen only by about 1%, which is around 15,000 decline. so you're seeing a very big difference here. the private sector is absorbing a lot of the problems. most of the problems here and the public sector has been raising taxes. but it's not been cutting spending or promoting structural economic reforms. in the meantime, the economy is extraordinary -- for gdp which fell by 6% in 2011 it fell shortly, as well, in 2010. but the economy is sliding, away. so it makes the situation even -- >> when you model out and try to

handicap what happens and your clients call you up and say, juli julian, what do you do? another week has gone by. there is no deal. every week that goes by without a deal, does that make you more inclined to think that there will be a deal because this is a painful way of getting there, or does this make you think we will have a very hard landing? >> well, i guess this is politics, isn't it? politicians know how to play the brinkmanship game. presumably, there is going to be a deal at some stage this week and in turn, that will set -- >> you're handicapping this week? i'm going to keep you on that if that's the case. >> that would be our baseline, right? but -- >> was that your baseline two weeks ago? >> this week. >> right. >> i think the hard deadline, right, is march the 20th. that is when there is 14.5 billion euros of greek debt with its defaulting -- not default g

defaulting, correct, 14.5 billion euro hes of greek debt. the concern is if there is not a second imf program in place by march the 20th, then you are going to, in fact, see that default emerge. so they have to really do something by then and they have to get the psi increased by then. .it's going to be a very painful process. and i think we should just be aware that there's a downside risk in the process that are going to be flukes in the next few weeks. >> julian, we're going to mark of calendars on march 20th. we might have to go live march 19th he at mid newt because that's whoebl when all of this will go down if it does. we'll talk to you soon. when we come back, a game of connect the dots for markets. we'll ask what the efforts in greece mean for stocks and bonds right here at home. first, a milestone for boston celtics forward paul pierce last night.

he moved past larry bird and into second place on the celtics' all-time scoring list. "squawk box" will be right back. that's huge. [ woman ] my boyfriend and i were going on vacation, so i used my citi thank you card to pick up some accessories. a new belt. some nylons. and what girl wouldn't need new shoes? we talked about getting a diamond. but with all the thank you points i've been earning... ♪ ...i flew us to the rock i really had in mind. ♪ [ male announcer ] the citi thank you card. earn points you can use for travel on any airline, with no blackout dates. laces? really? slip-on's the way to go. more people 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. until the end of the quarter to think about your money... ♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see the same information your advisor does so you can get a deeper understanding of what's going 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. hyundai genesis. in a new, faster-acting formula. zero-to-sixty in less time than a porsche panamera s.

the 429 horsepower genesis r-spec. from hyundai.

welcome back. a number of marketer earnings this morning. joining us now, howard gray and trey canipi a. howard, i'll begin with you. we were talking a lot about greece. the market seems to be anticipating that a deal is going to get down within way or another, isn't it? >> well, i'm not so sure. i'm not so sure that we're

overemphasizing the importance of greece. let me put it this way. i'm hard pressed to think of a single spending decision in the united states economy that has anything to do with greece. it has nothing to do with the number of pickup trucks we sell, iphones that we sell. you can go on and on. greece is a problem. it's an issue. but it's become, i think, less and less of an economic problem. i think it's more of a financial event. but even there, the ecb is going to backstop the banks. it's the lez lender of last resort for the banks. we know that. from an economic point of view, i don't think there's a lot of bmws that are still being exported to dprooes. >> maybe not greece as a whole, but it's representative of the issues that remain in europe as a whole. >> it's a problem, but when you look at the world economy, the u.s. economy has been overing expectations now for 18 weeks in a row. we're in the 37th month of an explanation. manufacturing not only in the united states, but on a global basis. the global pmis have been surprisingly strong.

i think maybe we're putting too much emphasis on greece. i think greece is less and less important, especially for investment here in the united states. >> trey, how do you see things in the markets? obviously, a great start to the year. the euro, for example, has been rising and you have to believe that's on the thought that something positive is going to happen over in europe. >> well, let's he be honest here. you can't fight the tape. our market continues to work up. i happen to think that our market is working higher because of a gridlock rally. i think the gridlock rally will continue because it seems like a foregone conclusion that obama is going to get reelectsed. i don't think the republican candidates have any serious shot at winning. gets what? the market and the economy does like that because the framework in washington really isn't going to change, necessarily, in the next couple of years. with the economic news, it has been beating expectations and the reason that is because of gridlock in washington. washington has now been set aside. you're not going to see a lot of policy changes. and guess what?

the economy and thus the market is liking that. so i'm not going to fight the tape. the gridlock rally continues. >> howard, you're not fighting it, either. you're positive on the market, but where are you investing right now? >> i think the best visibility remains with some of the large cap technology companies. i sound like a broken record, i know, but apple at 11 times earnings, seems to me like a stock that can still do very well. and google, which is still below its 2007 high of 745, at 14 times earnings with $12 billion of free cash flow, i think that remains very attractive. >> google's earnings aren't good lately. that doesn't concern you at all sfp. >> the stock is lower when they announced because it got hit about 8% or 9% on that news. but i focus on the top line. they had 25% revenue growth compared to ibm whose stock went up on its quarterly earn eggs. the best indicator of a company's ability to grow is the

top line. ultimately, it's the revenue growth that you want to look at. look at the facebook ipo. facebook it being priced it sounds like at like 20 times revenues. google is under five times revenues, 14 times earnings, $12 billion of free cash flow, i think that's the real value. i think facebook makes google look exceptionally cheap. >> we'll make that the last word. good to see you. trey, enjoy the trading day. coming up, cvs caremark out with quarterly results, the company's ceo will be joining us in the next hour and later, it's your money, your vote. first he ran for his party's presidential nomination. now former minnesota governor tim pawlenty will be spending time stumping for mitt romney and he'll join us live at 8:40 eastern. stay tuned for that and more coming up after the break. at the top of the hour, samsell rides on to the "squawk"

set, an activist, real estate mogul and a billionaire with a license to invest. don't miss him. . used to be we socked money away and expected it to grow. then the world changed... and the common sense of retirement planning became anything but common. fortunately, td ameritrade's investment consultants can help you build a plan that fits your life. take control by opening a new account or rolling over an old 401(k) today, and we'll throw in up to $600. how's that for common sense?

you walk into a conventional mattress store, it's really not about you. they say, "well, if you want a firm bed you can lie on one of those, if you want a soft bed you can lie on one of those." we provide the exact individualization that your body needs. welcome to the ultimate sleep number event. not just ordinary beds on sale, but the bed that can change your life on sale. the sleep number bed. this is your body there. you can see a little more pressure in the shoulders and in the hips. now you can feel what happens as we raise your sleep number setting and allow the bed to contour to your individual shape. wow! that feels really good. it's hugging my body. it's not about soft or firm. it's about support where you find it most comfortable.

right now, queen mattresses start at just $599. and save an astonishing 50% on the final closeout of our innovative limited edition bed. you can adjust it however you want so you don't have to worry about buying the wrong mattress. hurry this week to the ultimate sleep number event. only at one of our 400 sleep number stores. my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i come to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country.

♪ welcome back, everybody, we're in the chairs where we get to talk about some of the items that have caught our attention today. quickly i want to point out a daily news story that's here an

we think about our problems and how things are in trouble in the united states. in iceland, they have much bigger problems. this is population of 300,000, it's an island, a contained population. they don't have a lot of immigration. as a result, you never know when you might end up dating a cousin. now there is a new website to help you try to figure this out. there's a new website that you can tell if you are related, either to the person who is your love interest, to find out with your icelandic i.d. by entering it or to find out if you're related to any other celebrities, like bjork. >> what's the title? >> "the book of icelanders." and they interviewed someone who said he was very relieved when he learned that his ex-wife and distantly-enough related, she was only his seventh cousin. >> zuckerberg tax, talking about this earlier. some of our very astute viewers sent in some notes about this column and suggested that i

don't think we understood completely. there is no estate tax on stock. it's like a house. i can pass the house on to you. you only pay taxes on it when you sell the house. it's the same thing with stock. except that you only pay on the stepped-up number after i die. >> i think that's a provision you're allowed to pass it to your wife. >> to your wife. it's a spouse only. >> not to your kids for this situation. to your spouse only, that you can pass that on. but it has, there are a number of people, huge number of people who have been writing in about this to clarify the tax policy. it shows you what a touchstone this is, especially right now. >> keep sending us your comments on this. when we come back we'll be welcoming a very special guest host. sam zell blowing in from the windy city, what the legendary investor is buying right now. "squawk box" will be right back. . spark cash gives me the most rewards of any small business credit card.

it's hard for my crew to keep up with 2% cash back on every purchase, every day. 2% cash back. that's setting the bar pretty high. thanks to spark, owning my own business has never been more rewarding. [ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet? this guy's amazing.

you will find in today's retirement portfolio

from the windy city to the "squawk" set. >> may i have your attention, please? >> we hold the exclusive deed to real estate tycoon sam zell for the next hour. we'll square off on the economy, the election and his newest takeover offer. >> prescription for profits, cvs caremark breaks down the first quarterly results. >> the dow at the highest level since 2008. we'll go behinded running of the bulls as traders zero in on risks out of europe and the middle east. the second hour of "squawk box" begins right now. ♪ ♪ good morning, welcome to "squawk box" here on cnbc, i'm andrew ross sorkin, along with

becky quick and our good friend joe kernen has the week off. greek political leaders are at it again today, trying to finalize a fiscal reform deal needed to secure a new $172 billion rescue package. of course they've missed several deadlines along the way, angering leaders of other eu leaders and prompting them to warn that the eurozone can get along just fine without greece. also this morning, nokia cutting 4,000 more jobs, about % of the workforce, the chief executive has announced plans to slash more than 30,000 positions in total. the latest cuts taking place at the smartphone assembly plants in finland, hungary and mexico. and watching shares of dow component walt disney, disney beat estimates by eight cents, with quarterly profit of 80 cents per share, but revenues were short of consensus. the movie studio posted a decline. take a look at futures right now. we're looking slightly up across the board. dow would open up about 29

points higher. s&p 500 would be up about 2.5 points, the nasdaq would open up a little over four points higher. becky, back to you. >> andrew, thank you very much. our guest host for the next hour is one of the world's big bt names in real estate. we're talking about investor sam zell, chairman of equity group investments, and sam, i want to thank you very much for coming in today. >> my pleasure. >> there's possibly nobody in the world who understands what's happening in real estate better than you. you have timed the market like nobody has ever done in the past. that's why i'd like to start out asking you about where you see the market right now. i know there are a lot of different areas that you can watch. but if we could start off talking about the housing sector in particular. that's the one that has so many americans kind of on edge at this point. what do you see right now? >> i see a scenario where rather than let the elements of the business world take care of the problems, we basically stopped

the process of creating a market clearing. and by virtue of doing that, we've created all of this uncertainty. that basically means that somebody like you says, why should i buy a house? there's 50,000 of them waiting to get foreclosed. and then there's another 50,000 beyond that. so i think that from my own personal point of view, i think had we allowed the market to clear, without trying to stop reality, a little story about sticking the thumb in the dike, i think we would have a healthy housing market today. >> what would the collapse have looked like? and by the way, i think your mike is rubbing right on the corner there, you got it. what would the collapse have looked like if we didn't intervene on some level, mac, can you help out one second with the microphone here? >> needless to say, i don't know. what i do know is we have a situation today where we have

whatever it is, a third of the houses, that are under water. we have huge backlogs of foreclosures. more important is, if the foreclosures were all happening today, then you could start tomorrow. but instead, what you have is, all of these programs trying to stop the dike, fill the dike. but the water is coming. you know, and you just can't, you can't miss reality. >> which of the biggest problems were the most problematic in terms of putting off -- or is it just the idea of trying to put off paying itself? >> it's, it's putting off facing up to reality. and life is full of examples of this. i don't know any examples where it comes out well. in other words, i don't know any examples where, you know, avoiding reality, somehow or other makes did better the next time around.

>> if you take your finger out of the dike and remove all the programs, what happens? how would you handicap what happens to the economy? what happens to markets in the short-term and the long-term? how long does it take you to crawl out of whatever hole that ultimately becomes? >> well, first of all, i think the hole is significantly greater today than it was five years ago when this started. >> so pre-2007? >> pre-2007. that's when we quote-unquote discovered the hole, so to speak. and by virtue of all of these programs, instead of foreclosing and cleaning up and starting anew, like the stock market does, like every business that commodities, et cetera, you got to clear. and the longer we avoid clearing, the longer we're going to be living with this problem. >> let me just jump in real quick. they want me to talk about sprint, the earnings are just out, excuse me for interrupting,

mr. zell. it looks like sprint is reporting a loss of 43 cents, it says they added 507,000 net prepaid subscribers in wireless. the shares look loo they're bid a little bit higher on the outlook here. but you know, if you take a look back at what, verizon for example and at&t and the kind of things that they've talked about. the iphone has been great for business in terms of adding subscribers. but it almost turns out to be loss leader. you're paying so much for the subsidies, obviously that it turns out to be a loss leader. i'm trying to get more information on sprint. but it looks like the loss for the quarterly was 43 cents as we get more information on the earnings and the outlook, we'll bring it to you. right now, bid/ask, it looks like the shares are going to open higher. >> sam, why don't we continue with that. i think when people look back on what happened with the housing industry, you said yourself, the hole was much bigger than we

realized five years ago. and the thought was, you have to make sure that you put some sort of a back-stop there just like we did for wall street to make sure that americans, average americans didn't feel as great of a loss. obviously it didn't work, because we saw the biggest decline in housing than we've seen since the great depression. >> there's a big difference between providing assistance to the banks that are critical to our entire society functioning, ala what we're trying to do to iran. well, if our banking system didn't work, the calamity is almost immeasurable. so to try and equate coming in and in effect, protecting the banking system with protecting the housing market, is apples and oranges. >> but you understand the political spin and the way it takes off. >> i think you asked me, not a

political question, you asked me an economic question. and i'm answering it on an economic basis. >> but the reason the president puts, i won't even try to figure out why he's doing this. the president in his most recent state of the union address, brings up again this idea of refinancing all of the homes that are out there. and some people will say, okay, he's using this to his political advantage, we're in an election year. other people say it's a way to try to tamp down the populist anger that's come as a result of the bailouts on wall street. what he's doing right now, talking about refinancing, does that bother you as much as some of the other programs that have come before? >> i think that, you know, refinancing houses would be terrific, as long as they were refinanced at realistic levels. >> at market levels. >> at market levels. the fact that interest rates are very low right now, conceivably, if refinancing were created, somebody who might be under water today might not be under

water tomorrow. but when it's all said and done, at least from my experience, lenders have always, always preferred a redo of the debt than a foreclosure. always. so in many cases, i think that there's lots of opportunities to modify loans, ala what you're describing. but nowhere near as many opportunities as politically everybody would like. >> if we could make you president zell for the day, you would do what? >> resign. >> with the housing situation? >> i'm putting you in charge of housing policy for the country for the next four years, you do one, two, and three. what are the first three things you do? >> probably, i think the first thing i would do is, i would encourage lenders to move

forward and exercise their legal rights, literally not so much to hurt anybody, but to resolve the issues. remember, we're different from any other country in the world. we are the only country in the world where you can borrow money on a house and walk away from it. everywhere else, all the people in europe, all the people who borrow money in brazil, they're all personally liable for 100% of the debt. so by virtue of not being personally liable, we've created a giant moral hazard. >> would you change the policy? >> would i change the policy? absolutely. do i think that we should create a scenario where everybody knows they can borrow the money and if it works, they do great. they make money, and if it doesn't, you give it back to the government? >> and use your house as an atm. >> i think that's what's happened. i think you have a giant moral hazard that must be eliminated. if you borrow money to buy a

house, how you cannot be responsible? >> don't you feel like the housing market is getting better? you sound more negative than maybe i would expect. it feels like the market is getting a little bit better. >> i don't think there's any question that the market is getting better. there isn't any question that the job market is getting somewhat better. having said that, the degree of "better" relative to the number of houses that are quote-unquote in foreclosure, plus the number of houses where the debt is significantly more than the value is a gigantic issue. it's not a couple of houses. and if we could just get rid of them or wait for another month of growth, it would go away. this is a problem. and i think there's a growing obsolescence problem. because the more these houses are vacant, the more risk there is of real deterioration.

and there have been many cases where you know, you had more than one house on a block, and vandals went in and took all the copper and took all the piping and, all of a sudden, it's not a house any more. >> and in some situations, they've gone in and started tearing down some of these houses. is this the proper -- >> well it certainly, if they had monitored them up front, my guess is they wouldn't have, had to tear them down. if the lenders had taken ownership immediately, then the lender would have had an incentive to maintain the house. but what you have is the worst of all world, where the owner walks away, the system doesn't allow the bank to take control. and you end up with an asset sitting there, nobody is responsible for it. and it deteriorates. so the amount of the loss is compounded by virtue of the fact that you've quote-unquote constipated the system. >> given the context you just provided, would you buy into the

residential market right now? not on a personal level, i'm suggesting on a corporate basis. we can talk about corporate real estate later. do you look at this as an opportunity, then? >> i think that there's no question, that the distress in the single-family market is an enormous quote-unquote opportunity. the question is how do you execute it? i'm the cham of the board of equity residential. we're the largest apartment company in the country. we have an average of 400 units per site. so when i need to manage my process, i have 400 people in the same place. now translate that to 400 houses. in 400 disparity locations, we want to consolidate, we want density. in owning single-family houses, you want just the reverse, you want one on that block and one

over there. because the further apart they are, the less they have, the risk of contagion, one to the other. but the answer is, the execution of taking advantage of this, is much more difficult than anybody envisions. we've been studying the matter for the last five or six months. there are numerous people around the country who have put together programs. but to the best of my knowledge, the biggest we've seen is 2500 units. that somebody has bought and sold or rented or whatever. we're talking about millions of units. and the question is how do you get it done. how do you execute. how do i get you know, 1,000 people to agree to modify their loan? by the way, in the next ten minutes. i mean, it's not a realistic assessment. that's why historically, you had foreclosures that cleared the market. and create a whole new

environment for going forward. >> sam zell is going to be our guest host for the rest of the hour. we've got more to talk to him about. not only with residential, but also commercial real estate. and by the way, he has an excellent point on the zuckerberg tax article we've been talking about. one we haven't discussed yet, which we'll ask him about when we come back, too. >> nice tease. >> it's the best point i've heard today. >> i look forward to talking about that with sam zell. comments or questions about anything see at "squawk," email us. and still ahead, cbs reporting quarterly results in line with expectations. we'll get the ceo's prescription for profits. first as we go to break, we're watching time warner shares. topping expectations, looks like the stock will be bid higher here, media giant is raising quarterly dividend by 11%. sometimes investing opportunities are hard to spot.

you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. [ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow. [ male announcer ] ducati knows it's better for xerox to manage their global publications. so they can focus on building amazing bikes. with xerox, you're ready for real business.

welcome back to, cvs earnings out this morning, matching street estimates with quarterly profit of 89 cents a share. revenues were slightly above estimates. joining us is larry merlot, president and ceo of cvs caremark. it's good to have you on the

show, how are you? >> good morning, fine. >> decent earnings here, i guess matching expectations, it looks like your comps were better than expected. how much do you think you're benefitting from this rift between walgreen's and express scripts? >> we're very pleased with our share. the real impact of the walgreen's express dispute is really being seen as we speak. come january 1st, there were many customers across the country looking for a new pharmacy. and we're in a great position and our retail teams are doing a terrific job in terms of showing our new customers a great service experience. and insuring the continuity of their pharmacy care. >> i mean there's no doubt you're taking share from walgreen's, aren't you? >> we are. we're seeing that, you know, beginning the first of this year. you know, we're seeing that reflected in new customers and we're seeing it reflected in our pharmacy growth. >> i think we're seeing it reflected in a one-year chart of

both your company and walgreen's, as a matter of fact. because they certainly look like they're going in different directions. let me ask you about the compress scrips and medco deal. have you lobbied the government against that deal? >> no, we're going to leave that you know, the results of that deal in terms of whether it goes through or not up to the regulators. you know, there's tremendous change in the health care landscape. those changes are creating challenges and opportunities, and our integrated is model as cvs caremark is uniquely positioned to compete in the marketplace. and the products and services that we're bringing into the market are resonating for our clients and their members. >> if the two biggest pbms are going to get together, wouldn't that be a material negative for the third, which is you? >> there's certainly a lot of competition in the market. as i mentioned, you know, the challenges that exist in health care around you know, managing costs and you know the fact that baby boomers are turning 65 at

the rate of 10,000 a day and that's going to increase utilization, our integrated cvs caremark model isible to address those challenges in a very meaningful fashion and we're quite confident in our ability to continue to compete effectively well into the future. >> you must have a good view of the economy. do you feel like you're gaining customers as the economy improves? more people are willing to come in, fill prescriptions and pay for those kinds of things? >> we saw about a year ago, as it relates to health care, we saw some concerning trends, where physician visits were down versus, versus a year ago. that has somewhat normalized, although we are experiencing a very weak flu season. and i would expect that as we migrate out of the first quarter, we will see improvements in that trend. >> well let me get you on the record, if i can, sir and get your comment on the news that as broken over the last couple of days or so, that the feds have raided two of your pharmacies in florida to stop the abuse of prescription painkillers.

last i saw this morning, just before we came on the air, you guys won a stay from that. can you just comment on that investigation and where it stands right now? >> well, first of all, you know our focus on patient safety is unwavering. and of the highest importance. and you know, we have worked with the authorities at the federal and state level in terms of preventing drug abuse. and insuring that prescription drugs do not get into the wrong hands. as a matter of fact, last fall we stopped filling prescriptions for a small group of licensed physicians in the state of florida. and we'll continue to work with the authorities on this matter. >> sir, good to have you on the program this morning, larry merlo, the president and ceo of cvs caremark. thank you. >> thank you. when we come back, we will have more of our exclusive conversation with billionaire investor, sam zell, we'll tackle everything from the real estate market to facebook and some of the tax discussions we've been having this morning. and the running of the bulls,

the dow closing in on the 13,000 mark. we're going to go behind the rally. "squawk box" will be right back. [ male announcer ] the draw of the past is a powerful thing. but we couldn't simply repeat history. we had to create it. introducing the 2013 lexus gs, with leading-edge safety technology, like available blind spot monitor... [ tires screech ] ...night view... and heads-up display. [ engine revving ] the all-new 2013 lexus gs. there's no going back.

intuitive trading platform from charles schwab. fine-tune technical analysis with the integrated chart tools sidebar. pinpoint your target more efficiently with clearly categorized, highly customizable technical studies. plus, scan any stock or etf against time-tested indicators with built-in chart pattern recognition. call 1-888-4schwab.

and open an account and trade up to 6 months commission-free. talk to chuck and get started with streetsmart edge today. the world needs more energy. where's it going to come from? ♪ that's why right here, in australia, chevron is building enough power for a city the size of singapore for 50 years. what's it going to do to the planet? natural gas is the cleanest conventional fuel there is. we've got to be smart about this. it's a smart way to go. ♪ we're back on this wednesday

morning, just ahead at 7:30 eastern, the dow jones industrials looks like it would open about 20 points higher. the s&p 500 would be up a little over a point and the nasdaq would be up over 2.5 points if we opened up right now. >> our guest host for the next hour is one of the world's biggest names in real estate. investor sam zell, the chairman of equity group investments is here. and sam, we talked a little bit about the zuckerberg tax. this is an article that's, an op-ed piece in "the new york times" today, that lays out the idea that potentially the richest americans should be taxed on a market-to-market basis for their stock. because the author of the article thinks that the american taxpayer is getting ripped off by people not paying these tam taxes. you've got a great argument against it, what is it? >> it starts with a simple premise, how do you measure what's a profit? if you own web van in 1996, and it went public, and it doubled in price, would you have had to

pay the tax? according to this guy, yes. the reality is, web van became worth zero. and i can go on and on. so the answer is, there are no profits until there's realization there are no losses until there's realization. and this is contrary to the reality of what realization is. >> but you also make an argument that this is against what the nation has been set up for so that you can come in as an entrepreneur and really try to build a big company. >> well, our society is built on aspiration. our society and its strength and unique characteristics is that it's the most aspirational environment in the world. an integral part of that aspiration is the opportunity to create wealth. if you were market to market every year, forget about how you administrator it, you basically

discouraging people from building big companies, et cetera. if bill gates had had to pay tax every year on his microsoft appreciation stock, number one, he wouldn't have the wealth he has today. and number two, microsoft would not be the company it is today. >> because he would have had to sell a stake in the company -- >> on an ongoing basis,ry year. >> i agree with you. another example he raises is the steve jobs example. which is upon death you're able to pass it along to your spouse, the stock, on a stepped-up basis. and 0 on a commercial break you said you were talking tour brother-in-law about the tax issue. >> 40 years ago. i wondered how stepped-up basis got in the tax law. and the answer was, that small businesses, farmers, all kinds of not multibillionaires, all are really the basis upon which stepped-up basis exists. the idea that you own a farm and you die and your wife has to sell the farm?

she can't live there because you have to pay the government? i mean the whole idea was to avoid exactly that situation. and he obviously doesn't address it. >> let me get your reaction to this one line in here about the proposal that we're talking about the mark to market. >> the proposal follows the ronald reagan model of broadening the base of tax without increasing rates. your answer to that? >> you know, the answer is -- >> that's a controversial line. >> why don't we just confiscate everybody's wealth. then we would eliminate the problem. then there would be total fairness. i just, you know, i just don't see that. i mean the answer is, would i like to see us broaden the base? you bet, there are lots and lots of ways in which we can do that. we could eliminate and purify the tax system. we could go to a flat tax. there's a lot of things we can do. there isn't any will to do any of those things. and so, you know, that kind of a statement is, you know, gratuitous, but not relevant. >> but all of these problems that we've seven that have been addressed in the media about

corporations paying taxes, about individuals paying taxes, could be addressed with a simplification of the tax code. >> yeah. and acceptance of the fact that the tax code is not social policy. >> yes. >> the tax code is there to raise revenue to pay for our environment and our government. what has happened is that we've allowed the tax system to truly become a methodology of achieving other objectives. and therefore, we've obfuscated and screwed up the whole tax system. >> maybe you can look to things like charitable giving. you can look to the home mortgage interest payment deductions on issues like that. you can look much more broadly at the lobbyist who is are able to get in specific things for corporations or industries. but if you add up all of this, and you look at the simpler tax code, would you go along with

what simpson-bowles laid out in that plan with what needs to happen? in terms of getting rid of a lot of the loopholes and potentially lowering rates as a result? in a tax-neutral way? >> i think you know, simpson-bowles is just the latest study that the president hasn't read. and the answer is i'm very supportive of the direction of simpson-bowles. we've got to call a spade a spade. we got to face reality. and what we've been doing is not facing reality. and the result is, we don't solve problems. you know, 40 cents of every dollar this country spends is borrowed. every year. 40 cents. if you borrowed 40 cents of everything you did, you know it's a question of time before you're broke. it's only a question of time before the united states is broke if we don't change our

policies and much better address our issues. >> mr. zell is going to be with us for the rest of the hour. if you're looking to connect with "squawk box" on line, you can follow us on twitter, our handle is @squawkcnbc. that's squawk@cnbc.com. coming up, austan goolsbee gives us a look at what's at economic stake. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities.

siemens. answers.

welcome back to "squawk box," let's look at some of the corporate earnings reports that have come out this morning. time warner earned 94 cents a share for the fourth quarter. above estimates of 87 cents and raised the quarterly dividend 11% to 26 cents per share. sprint reported a bigger-than-expected fourth quarter loss of 43 cents a share. analysts had been looking for 37 cent loss. but net subscriber additions of 1.6 million was the best performance in that category in six years. hotel operator, windham earned

47 cents a share for the fourth quarter. three cents above estimates and raised its annual outlook and hiked quarterly dividend to 23 cents a share. from 15 cents. thanks, scott. now let's get more thoughts from our guest host, sam zell, chairman of equity group investments. and you know, so much more to talk about. we haven't talked about politics. i think the last time we saw you, we were in the beginning of the republican primaries. you're a chicago man, but you're not a president obama man. you're a rahm emanual man. >> you bet. >> i have supported romney. because i believe romney is the only electable party that's in the republican race. >> you think, you look at newt, you look at santorum, you saw what santorum did last night with three different states. >> yup. >> there is a sense, even though i know you're a supporter of romney, that somehow he ultimately doesn't seem to

muster the sort of broader support from the republican base. >> do you think that, do you think that changes? >> well, i think, you know, i think the answer is, nobody is going to get elected president based on the votes of the republican base. the only way anybody gets elected president is to appeal to 50 some odd percent of the population. you can't do that just off of the republican base. we have a primary system that is skewed toward the narrower part of the republican party. i think that once we get through these primaries, and assuming we have a viable candidate, i think that it will, the appeal will broaden dramatically. >> i know you've been frustrated with the president's loip. i'm curious, as it appears that the economy seems to be getting better. we looked at the employment

numbers and housing, it's all relative. how much harder do you think it's going to become in november, obama is now 57.2%. is now the in-trade for obama being re-elected. to this point it had been neck in neck. until recently when you put romney as the candidate up against him. part of it may be because of the confusion among the republicans in terms of who they think the front-runner is or who they think should win. part of it may also be friday's employment number. >> i don't understand the methodology of achieving those numbers. anybody who doesn't understand the power of incumbency, is very naive. so the president starts with an enormous advantage. whether or not a reading in february has enormous relevance in november is another story. i would remind you, however, that if you were to compare this

year economically, to 1992, you had a continually improving economy. and george bush lost. and why did george bush lose? because bill clinton and rahm emanual, and the first time i met rahm, he sat me down and he said, sam, it's the economy, stupid. and the first week rahm was chief of staff, and they laid out all of these plans for health care and changed the world and carbon this and -- i wrote him an email and i said, rahm, i met you in 1992, you said to me, it's the economy, stupid. guess what, it's the economy, stupid. and he wrote me back and he said, you want us to defer all this other stuff? and i said, you bet your ass. the answer is, had we focused object the economy, not spent the efforts on all of these

diverse goals, i think we'd be in much better economic condition today. >> do you think its going to be harder to make that argument? this is going to become an argument about relativity, though, right? in terms of relative to where we could have been so the business community often talks about at a point, at least mathematically looked like it had a very big point, only couple of months ago, because the economy didn't seem like it was moving. but as the economy does move. i don't know if you think there's just a blip the past month. how does that change the debate? >> excuse me. but did i miss one of the numbers? i mean did the economy grow 6% last month? i think it grew, i think we're growing at 1.5%. last time i checked, before recently, that was very, very slow growth. did something change in between? >> the unemployment numbers with the trend, people say it's so important, your point is a great one, in 1992, it was the same story. >> we were moving in that direction. >> there are also -- >> people who say the

unemployment numbers aren't for real, anyway. >> the reality is that the unemployment number is 15%. that's what it's been, okay? and it went from 16.5, to 15.5. okay? that's still massive unemployment. you can play with the numbers and come up with 8.1 or whatever the relevant number is the reality is, the number of people out there who are not gainfully employed is still a very significant number. >> you think growth in this country would be more robust right now if president obama was not in office now? could you realistically make that argument? >> i would say it a different way. i believe that had president obama been elected in 2008, and immediately focused on nothing but the economy, we would be in dramatically better shape today. if we hadn't wasted all the political capital on obama care, let alone the economics of obama care, cap and trade, all, all

this stuff. we had a problem. our economy was in very, very serious shape. and the only thing that should have been done at that point, the only thing, is focus on the economy. >> what should have been done that wasn't? because you've also made the argument that the housing market should have been left alone. that we should have felt the pain and kind of come out of it. what should have been done to fix the economy? >> i well i think that some of the things, you know, i'm not against the reduction in fica payments. except in january of 2009, reduction in the fico payments would have had a huge impact. now, a lot less of an impact. et cetera, et cetera. in other words, if the focus had been -- look at the stimulus bill. a trillion dollars down the drain. why? because instead of building you know, instead of building things, instead of quote shovel-ready that weren't shovel-ready. what did we do? we extended the ability of

unemployment to 99 weeks. 99 weeks? wow. that is a disincentive for an awful lot of other people to be working. we gave the cities and the states more money to hire people they didn't need. >> although a lot of that money went to pay for teachers and police officers to keep them on. at least for the first year. after that it kind of dropped away. >> and you're suggesting to me that the day before there was riots in the streets? i don't think so. so the point is, we, there wasn't people screaming, we need more policeman, we need more teachers. >> but we would have lay off and furloughed a lot of the existing teachers and police officers if state and local budgets didn't have the hole filled for them by the feds. >> the issue with the states is the same as for the federal government. neither have been willing to live within their means. neither have been willing to you know, connect revenue to expenses. >> there was a thought that this was a temporary blip.

that we would see tax receipts come back. we haven't. we're still talking about something around 15% of gdp being collected in revenue. so maybe that argument has run out of room at this point. that the cuts need to come. it was not a temporary setback. that the tax relates have dropped. >> did you actually find somebody who thought it was temporary? >> i remember thinking at the time, i honestly remember thinking at the time, that okay, this is a one-off. and these receipts will come back within a year or two. >> do you believe in the tooth fairy? >> my kids might be watching. i do remember thinking that the revenue would come back more quickly than it was. and there were a lot of economists who were surprised by what a slow return and slow recovery, given the dropoff that we saw. and maybe that fits to your point that maybe we shouldn't have done some of the things that we did. >> recoveries are the result of confidence. when the president was elected and took office in '09, had the president focused on only the

economy, i think the confidence level within the entire country would have been measurably better. and i think we would have a better economic result. i think by virtue of cap and trade and the epa and the labor guys and boeing. you created one uncertainty after another uncertainty. and then the guy who is taking the risk should write a check? it's a lot he's wrer to say, gee, maybe next year. >> we're going to leave it there and continue the conversation after the break. we still have a lot to talk about. i want to talk about the middle east and oil. i know you have the pipeline. >> and commercial real estate. >> we don't have him for long enough. we'll have more "squawk" in a moment with sam zell. back in a bit. oh. but i did pick up your dry cleaning and had your shoes shined. well, i made you a reservation

at the sushi place around the corner. well, in that case, i better get back to these invoices... which i'll do right after making your favorite pancakes. you know what? i'm going to tidy up your side of the office. i can't hear you because i'm also making you a smoothie. [ male announcer ] marriott hotels & resorts knows it's better for xerox to automate their global invoice process so they can focus on serving their customers. with xerox, you're ready for real business. brad needs car insurance, but, uh, brad doesn't want to spend too much. who's brad? this is brad. ahh! well, progressive has lots of discounts for a guy like brad. brad's intrigued. paid in full, safe driver, multi-car, going paperless -- all can help brad save a bunch. sign brad up. cool! jamie will ring you up. show brad the way. who's brad? oh, here we go again. discounts that everyone can use. now, that's progressive. call or click today.

welcome back, let's take a look at the futures this morning. the dow yesterday closing at its highest levels since 2008. and you're going to see now, the futures are slightly higher once again this morning. the dow futures up by over 24

points, the s&ps are up by 2.35. mortgage applications rose 7.5% last week according to the latest figures from the mortgage bankers association. that increase was driven by a jump in refinancing activity as the average 30-year fixed-rate mortgage fell four basis rights to 4.05%. >> coming up, how rick santorum's victories last night could affect president obama's election year strategy. we'll turn to the president's long-time adviser, austan goolsbee, for a look at this and a lot more. astan will in our "squawk" board rim. and then tim pawlenty is on set, we'll be looking at him, weighing in on santorum's turn and how it could alter the race. more on "squawk" in a moment.

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. tdd#: 1-800-345-2550 at charles schwab, we'll give you personalized recommendations tdd#: 1-800-345-2550 on how to reinvest that old 401(k). tdd#: 1-800-345-2550 so talk to chuck tdd#: 1-800-345-2550 and bring your old 401(k) into the 21st century. tdd#: 1-800-345-2550 rollover your 401(k) or ira and receive up to $2500. tdd#: 1-800-345-2550 see schwab.com for terms and conditions.

let's get some parting shots from our guest host for this hour, sam zell, the chairman of equity group investments. sam, we've had you here for now 52 minutes and counting and we have not talked to you about commercial real estate. which is a sin. >> i must be lucky. >> what's the state of commercial real estate right now. do you see opportunities? >> i think you know, it starts with you know, real estate is all about supply and demand. we have built nothing since july of 2007. that's the good news. so we've had no additional

supply. the bad news is, that we've also had less job growth and less demand. so literally, the existing facilities are getting filled up, but at rates that don't reflect new cost. so i think real estate still, commercial real estate still has another couple years to get its act together. i mean in, in 1990, i gave a speech that ended with, you got to stay alive until '95. and somebody recently asked me. what was my latest mantra. and my answer was, you've got to come clean by 2013. that's the point at which all of these extensions and stuff has to get cleared out. otherwise you're going to have a commercial real estate market that doesn't work. >> what is the answer to do with the cash thing. >> he doesn't buy equity real estate today. i don't think there's big bargains. and the grave dance is supposed to be the one who buys at the

bottom. i don't think there's necessarily, i don't think we're necessarily in any kind of a bottom. >> what do you see, you're back in brazil, i find it interesting that as we talk about what's happening in the u.s. you're back. you're one of the first to go there in a big way. >> right. and we never left, okay? we have all kinds of other operations in brazil. we did get out of the home building company. and then kind of the world came to an end in that arena. and we have an opportunity and we made an offer to take part of the home builder private. >> you're still optimistic about what's happening there. is the equity market is up what, 15% or so this year. >> think one word. the problem in the world -- is called demand. and what you need to do to make money, is to focus on where is the demand. and you go to brazil. you go to a lot of india, a lot of places, there is demand.

what's our problem here? this country? lack of demand. it's no more complex than that. >> we'll get your thoughts on the middle east. just because you have that pipeline in egypt. >> they blew it up again yesterday. >> they blew it up again yesterday? >> yeah, 12th time this year. >> what's going to happen with israel. >> i'm hopeful that israel figures out how to deal with iran. i don't know what the definition of that really means. i'm, i'm just, you know, i'm concerned about the country. i'm concerned about the middle east. i have a lot of connections in the middle east. not only in israel, but in a lot of the other countries in the middle east. and i think it's a very, very difficult situation made dramatically worse by you know, iranian craziness. >> iranian craziness. >> we want to thank you so much for joining us today. an hour is never enough time. >> my pleasure. >> we appreciate you taking the

time with us today. >> thank you very much, my pleasure. >> we look forward to seeing you again soon. straight ahead, another boy from chicago, the man behind many of president obama's economic policies, he's hustling back to the set this time. >> we're going to do this one more time. >> austan goolsbee, the former chairman of the council of economic advisers, will be with us the next hour. "squawk" is coming back with austan in the 8:00 hour. goodnight, stuffy. goodnight, outdated. goodnight old luxury and all of your wares. goodnight bygones everywhere. [ engine turns over ] good morning, illumination. good morning, innovation. good morning unequaled inspiration. [ male announcer ] the audi a8, chosen by car & driver as the best luxury sedan in a recent comparison test. you walk into a conventional mattress

store, it's really not about you. they say, "well, if you want a firm bed you can lie on one of those, if you want a soft bed you can lie on one of those." we provide the exact individualization that your body needs. welcome to the ultimate sleep number event. not just ordinary beds on sale, but the bed that can change your life on sale. the sleep number bed. this is your body there. you can see a little more pressure in the shoulders and in the hips. now you can feel what happens as we raise your sleep number setting and allow the bed to contour to your individual shape. wow! that feels really good. it's hugging my body. it's not about soft or firm. it's about support where you find it most comfortable. right now, queen mattresses start at just $599. and save an astonishing 50% on the final closeout of our innovative limited edition bed. you can adjust it however you want so you don't have to worry about buying the wrong mattress. hurry this week to the ultimate sleep number event. only at one of our 400 sleep number stores.

laces? really? slip-on's the way to go. more people 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.

he was president obama's economic adviser, now austan goolsbee will be counsel to "squawk" on the economy, the jobs report and the race for the white house. rick santorum is staking his claim for the gop presidential nomination with wins in colorado, missouri and minnesota. >> it's 1600 pennsylvania avenue, you better start listening to the voice of the people. >> former minnesota governor, tim pawlenty will weigh in, he's co-chair of the mitt romney campaign. and a comeback story in the auto sector. >> whoa, that was close. >> u.s. automakers on pace to set a new export record. ♪ i'm a maniac >> the third hour of "squawk box" begins right now. ♪ she's a maniac

♪ on the floor all right, welcome back to "squawk box" on cnbc, first in business worldwide. i'm becky quick, along with andrew ross sorkin and scott wopner. we've been watching the futures and they've been indicating slightly higher, even after the dow closed yesterday at the highest levels since late 2008. you see now the dow futures are indicated up another 24 points. the s&ps are indicated higher by another 2.25 points and we've gotten numbers from mcdonald's, dow component mcdonald's out with the january comp store sales. >> it's a beat across the board. u.s. same-store sales, 7.8%, that was versus an estimate of 6.9. global 6. versus the estimate of 5.9. they beat in asia, the middle east and europe. this is a stock that's been hitting a new high almost every week. it's been trading up basically

at an all-time high. it looks like it may actually be higher right off the open this morning. it's the juggernaut that is mcdonald's. >> but you take it as a sign of a better economy? a weaker economy? or better orangeses? >> exactly that. i take it as better operations. >> i think it's better options. the soer, was it skinner? >> skinner is one of the best-performing ceos from an operational standpoint and the guy knows how to run a business in any time. >> look at what they're talking about, why the u.s. same-store sales were up 7.8%, because. new additions they have. they always breakfast choices are there. their line-up in the core classics but then chicken mcbites are new addition. the bite-size premium chicken available for a limited time. >> it's a good sign on the relative basis about the economy. because it used to be that when mcdonald's did well, that meant that the economy was not necessarily in a great place. it's a contra indicator on an

economic basis. >> a better jobs market is better for mcdonald's. they probably sell more breakfast items if more people are working and heading to work and stopping at mcdonald's. as europe is falling apart, mcdonald's is staying together. it's amazing. >> it could be exactly that argument. europe is where we were a few years ago. and people are looking for more value out of some -- >> i would like to see them break out numbers for greece. a number of interesting quarterly reports that we're keeping an eye on, sprint nextel posting a bigger-than-expected loss. shares are rising as net subscriber additions were the best in six years. it comes after the introduced the iphone. time warner posting better-than-expected quarterly results. the company raised the quarterly dividend and announced a $4 billion stock buy-back program. and so many companies now, trying to figure out what to do with the cash and buying back stock rather than giving it back as dividend. i'm always worried about buy-backs. >> time warner has done well lately. the stock has done well. the interesting thing is about the competition between netflix

and netflix seeing hbo as one of its biggest competitors going forward. that's an interesting story. >> it is. >> and in europe. >> go to europe. >> thank you. >> one deadline after another. has come and gone in greece, leaders are meeting again today in a bid to strike a deal on painful austerity steps in return for another bailout package. the delays have prompted some eu leaders to warn the eurozone can live without athens. european equities at this hour, if we take a look how we're trading across the pond, up across the board modest gains from london through athens. >> and joining us now for the next hour to talk about the latest on europe, the u.s. economy and of course, politics, austan goolsbee, another chicago boy for the show, former chairman of the council of economic advisers, he's also an economics professor at the university of chicago's booth school of business. and of course, great to have you on the show. >> great to be here. >> you've criss-crossed only slightly with sam zell. i'm going to start with sam zell and some of his views i imagine

you had an opportunity to hear what he was saying about the president, about the economy. comparing this to 1992. you say he's wrong? >> well, look, i've known sam for some time. he's a real character, i like him a lot, he's a good chicago guy. i think the 1992 comparison for anybody watching at home is probably not that apt, if you remember, all through 1990, all through 1991, both of those years, the unemployment rate was rising the whole time. it wasn't until the late summer of '9 2 that the unemployment rate even starts to come down. so -- >> his point was, for anybody who missed it and is just tuning in, sam zell had said this could be an election year like 1992 rks where at the end, he said in 1992, the unemployment rate was coming down, but george bush still lost on the economy. and your point is that the numbers don't quite match up. >> all i'm saying about that is in a technical sense, the unemployment rate was coming down. but it was only doing that two, three months before the

election. so at this point, in 1992, the unemployment rate had been rising for two straight years. >> so it feels a little different. his point still might be true. i hope not. but -- >> one of sam's points was what has changed in the last month or two? the employment picture may be better. but look at gdp. and also, do you give the president credit for whatever you think is happening to the economy, or is this happening in spite of the president? >> well, you got a couple of things going on there. i thought the first is, if you look at the gdp numbers, i think sam's right, the gdp growth has been moderate on, at the best of times. and some of the times in 2011 was pretty low. in the last gdp numbers, though, the private sector is growing almost 5% a year. there's just a huge negative coming from the shrinkage of government. that's balancing off against the

private sector growing that fast. i kind of think that's ironic. that is what you would want to have the balance be shifting back to the private sector. but it's just ironic that people are decrying that the reason the economy is not growing faster is because of the growth of government. but actually the government is shrinking, the private sector is growing quite fast. >> i heard something that you said -- >> let me read this what you said recently. the thing that's dragging down the economy is that the government is shrinking so rapidly, it's pulling the overall growth rate to 2.8%. that sounds like -- >> well. >> that's what you said recently. >> correct, that was a quote asking about the specific gdp number, that came out. and in that, the thing that was keeping the growth rate relatively low is that it was a big negative from government. the private sector growing 5% was a good sign. that felt to me a little bit like new news. that we were finding that growth

was going to be a bit higher. i'm still nervous, i think anybody who thinks because we had three or four jobs numbers that were relatively positive. it means we're completely in the clear. i mean they should remember what happened at the beginning of 2011. they should remember what happened at the beginning of 2010. a lot of from greece to iran to a lot of things going on in the world economy, i think we should not be so confident. >> i take your point. that the private sector has been growing and that the government has been shrinking and that is what we want to see. but i looked at some of the private numbers, because i was kicking that idea around in my head when the jobs number came out and i was surprised that private sector growth was still under 300,000. it was something, what was it like 280 or something? >> of jobs. >> of jobs, private-sector growth. i was surprised that it was not a bigger number of private-sector jobs being drawn

down, like i wouldn't have expected to see the number -- >> the challenge that we've had and why i think it's hard to envision how the private sector is going to grow substantially more than 5%, is normally in a recovery you get, you know, if the normal recovery is 5%, 2% is coming from construction. it's not going to be construction, we still got five million vacant homes in the country. so i think the shift to exports, the shift to business investment, and away from consumption and residential construction. which we know we have to do. we can't go back to that, that has made this hard to get out of. >>. when you think of private sector growth and you hear so many people who come on this broadcast, including sam, who talked about the uncertainty factor. the leadership in washington that's created this uncertainty. do you buy it? do you not buy it? the suggestion is that the private sector is growing in spite of the leadership in washington. >> uncertainty is a big issue.

but it's not policy uncertainty from washington. if we get the data on publicly traded companies around the world. you observe exactly the same pattern of accumulating cash on their balance sheet and great uncertainty about demand and about financial crisis. in virtually all the developed world so that tells you, it's probably not having to do with you know, they didn't pass a health care bill. they didn't, they didn't do some of those things. i think that's an issue. >> if you look at keystone or what have you, as an economist, take your political hat off, how much does that actually impact real decision-making? >> i think it impacts some. i think the issue of uncertainty is an important issue. i think the uncertainties over financial crisis and demand are by far number one the most important uncertainty. and you see that in the survey data of businesses themselves. if you ask small business, their number one problem is, they don't have enough sales. by far.

but i also think that the bigger policy uncertainties came about over leading figures in the government, getting up and saying, well maybe it would be okay if the u.s. government defaults on its obligations, as long as it's only for a couple of weeks. i mean -- that uncertainty from last summer was awful. and you saw it in the consumer confidence numbers, and in the business sentiment numbers. they just fall like a stone during that period. let's hope we never get back into that. >> do you think that has long-term impact? >> i hope not. i don't think so. >> given where the economy is today, you would almost say it's a blip. >> again, i warn you, let's not get too -- what's happened in the last three months is good. there's, there's a bunch of pent-up stuff sitting in the economy that's going to come out. but a lot can go wrong. and we were in this circumstance

through much of 2010, it felt like we were really getting some momentum and even coming out of the depths of the recession in 2009, sometimes it was like this. so i don't think we want to get overly confident. but it was positive, if we're growing 2.5%, 3% a year, that's a moderate pace, it needs to be a lot faster than that. >> but there's -- >> there's temperate enthusiasm in the white house right now? >> i would say they, if the unemployment rate is coming down and you're adding jobs in the private sector is growing almost 5%, there's going to be tempered enthusiasm. you see even in the republican primary, they're asking the candidates, well what are you going to do now that the economy is getting better. so i think that's fair. >> you point to housing and residential construction in particular, being the big draw-back, that's something we've heard from warren buffett, who said you're not going to see a real jobs turn until you see

construction and housing make a big turn, too. sam zell just talked about how he thinks the problems in housing are much bigger than we had anticipated before. and there's a much bigger hole there. >> i agree with sam. and i actually think it's misleading to say we can't recover until we get construction to come back. because what's, what's misleading about that is you're leaving out the phrase, we can't recover like the recovery of the 2000s. but the recovery of the 2000s wasn't sustainable. >> i'm making that a simpler statement than buffett actually said. >> yes, but there are many people who have that view. that they look at what growth was in the 2000s, and they say, if we don't get consumption back to what it was then, if we don't get construction back, what do we have? we have nothing. and i think the thing that that miss misses, what we want is to shift to a more traditional style of recovery which is driven by business investment. and so i do think business sentiment and uncertainty is an issue. let's try to address that.

and export growth. but actually we've seen quite a lot of export growth. manufacturing in particular has been doing quite well for the last several months, and in some sense, it's got to do better. because that's, those are the two things we've got to drive it. >> we're going to continue this conversation after the break. i one final question. do you think that the president has exacerbated in any way the uncertainty among the business community? >> certainly in different aspects. i believe there has been some policy uncertainty. now, it wasn't random in many cases the argument about high income tax cuts, for example. and should they be extended. the president, the president's position from going back to 2007 was, at a time when we don't have money, it doesn't make sense to give up trillions of dollars to keep high income tax rates the lowest they've been in

65 years. one argument you could say is well, that adds uncertainty. i mean, he wasn't trying to add uncertainty, that's been his position for years and years. >> we're going to continue this conversation, get more from austan throughout the show. thank you for great conversation. scott? >> thank you. coming up, victories for rick santorum in colorado, minnesota and missouri, clouding the race for the gop nomination. former minnesota governor, tim pawlenty will join us. but first, the u.s. auto industry is on pace to set a new export record. cnbc's phil lebeau has the story. >> remember when people said america's auto plants can't compete? they're on a record pace to export more vehicles than ever before. what's behind it and why is it going to get even stronger? [ horn honks ]

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. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector

that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

welcome back to "squawk box," the futures this morning are indicated slightly higher and while that may not look like much much of of a gain with the dow futures up by 2 is points, you have to remember the year this is has been for the s&p 500 and the dow. the dow sitting at its highest levels since late 2008. the s&p futures have gotten us to that point this is the best

start for the s&p in 25 years for the markets. so you continue to see these gains that push things higher. even though it doesn't look like a lot. you've got to add up the small gains. >> the slow melt-up, right? >> it is. let's look at shares of dow component, mcdonald's, the fast food joint reported a ed ed a global increase in sales, beating street of gains of 5.9%. sales in the individual world regions that mcdonald's splits this out, they look at north america, europe and then they look at asia pacific and africa, every one of those regions beat expectations as well. s european component might be the most important. the stock is indicated higher, that's a dow component so that will help things out, too. let's get to an auto sector story. auto manufacturers on pace to set new export reports and phil lebeau joins us with more. >> we've learned of another auto plant expanding production. this morning we've learned that

toyota's plant in princeton, indiana where they make the siena, the sequoia, the forerunner, they're going to be expanding production, increasing production by an unspecified amount, hiring several hundred workers. this is the third auto plant in the u.s. that we've heard about in the last week where they're going to be expanding and part of the reason why? take a look at what happens in terms of auto exports and we are seeing a record pace here. 2011, a million and a half vehicles, we're going to export 1.65. the last number is a mistake on my part. it should be more than 2 million vehicles by 2015 will be exported. a big part of the export story are the foreign automakers running plants in the united states. look at bmw, it exported or will export more than 192,000 vehicles outs of its south carolina plants. that's how many it exported last year. including 87,000 x3 suvs, in red-hot demand in the middle east and in china. by the way, bmw exports to 130

countries around the world. when you look at the top destinations for the vehicles made here and driven other places, it's easy to look at a map and see where our biggest markets are, canada, no surprise, they're our neighbors to the north. they get the bulk of what we make. close behind canada in terms of value, you have germany, and this may surprise people, china. especially with suvs and trucks, followed by saudi arabia. they love high-end u.s.-made vehicles. and then you have mexico, that's more of the low-end vehicles. one story that is playing out in the auto export business, is the difference between the dollar and the yen. because the yen is so strong, it's hurting production over there and as a result, the japanese automakers moving production to the united states. not only to feed the u.s. market, but to feed other markets around the world. and speaking of the yen, we have earnings early this morning from nissan. and what's interesting about nissan, is not the fact that they met expectations in terms of their profit, it's their forecast for the full fiscal

year ending in march, they expect to make $3.7 billion. that means nissan is expecting to be more profitable than toyota and honda, in essence to be the most profitable japanese automaker this year. guys, that's assuming a yen trade at 85. nissan clearly weathering the storms of the last year better than honda and toyota. >> phil, thank you very much, appreciate it. by the way, a programming note for you, we're going to be talking to actor clint eastwood about his halftime in america chrysler commercial on friday. part of our big pebble beach show. because clint eastwood is one of the owners of pebble beach. we'll be talking to him about with a lot of different things, the chrysler commercial is certainly one that has a lot of people talking. especially around this table. >> you'll have other surprises as well on friday. >> no surprise -- >> from pebble beach. great stuff coming up. >> bill murray is going to join us live. >> i didn't know if you were saying that. >> larry summers. >> randall stevenson, talking to

us about at&t for the first time since the deal. >> a lot of stuff on friday. >> tmi at this point or? >> no. >> and joe is scoping out the golf course. >> i have a first quarter pictu one of the fairways. >> we need work in this country and what is he doing? >> he deserves, this is hard-earned rest this guy has been around working -- >> if bill murray is half as good as he was last year, he was phenomenal last year, we look forward to that. >> we asked him about "caddyshack." >> i guess the kidding around is pretty much over, huh? >> let's do more of today's top headlines. still to come, a strong tuesday for rick santorum. we'll break down the race for the gop presidential nomination. former minnesota governor, tim pawlenty will be our special guest in the next half hour. [ male announcer ] the draw of the past is a powerful thing. but we couldn't simply repeat history.

we had to create it. introducing the 2013 lexus gs, with leading-edge safety technology, like available blind spot monitor... [ tires screech ] ...night view... and heads-up display. [ engine revving ] the all-new 2013 lexus gs. there's no going back.

ttd#: 1-800-345-2550 let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 at charles schwab, we actually take the time to listen - ttd#: 1-800-345-2550 to understand you and your goals... ttd#: 1-800-345-2550 ...so together we can find real-life answers for your ttd#: 1-800-345-2550 real-life retirement. ttd#: 1-800-345-2550 talk to chuck ttd#: 1-800-345-2550 and let's write a script based on your life story. ttd#: 1-800-345-2550

welcome back to "squawk box." shares of ralph lauren getting a boost. the company reporting third quarter earnings of $1.28 a share. 12 cents better than the street was expecting. ralph lauren is raising full-year sales and profit outlook. the united arab emirates says it will pump more crude to asia. the goal trying to help the region's top buyers cut their

dependence on oil sanctions that hit iran. andrew? >> nice to see ralph lauren do so well. the pants without the belt that joe always gives me a hard time about. those are ralph lauren suits. coming up, the dow at the highest level since 2008. "squawk" is coming right back. still to come this week on "squawk box," tomorrow, pepsi chairman and ceo will break out the company's earnings and we have a one-year roundtable with three "squawk" market masters. and friday, "squawk box" is live from pebble beach, california. with larry summers, at&t ceo randall stevenson and legendary actor, bill murray. >> it looks like -- it's in the hole! take the privileged investing tools of wall street and make them simple, intuitive, and available to all.

distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up $600 when you open an account. laces? really? slip-on's the way to go. more people 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. should we be letting him p-l-a-y with our t-a-b-l-e-t? [ mom ] i think it's fine. it's the new element from at&t so it's w-a-t-e-r proof.

cool. what else does it d-o? it's fast. it's 4g lte. what's l-t-e spell? nothing. w-h-y? hey, can we stop spell talking now? ok. a-y. [ male announcer ] buy a waterproof pantech element for $249.99 and get a 4g burst smartphone free. only from at&t.

welcome back do "squawk box" as we come up on 8:30 a.m. eastern. the tax code will be a major policy hurdle in the election year. in the last hour, equity group investments chairman, sam zell, gave us his take. take a look. >> society and its strength and unique characteristics is that

it's the most aspirational environment in the world. an integral part of that aspiration is the opportunity to accumulate. and create wealth. if you were mark to market every year, forget about you know, how you administer it, you basically discouraging people from building big companies, et cetera. >> sam zell commenting on a, op-ed in today's "new york times." you're right there -- >> i think it's only natural we get a comment. >> we should. >> please, continue. >> sam zell commenting 0en an op-ed in "the new york times" today, about what they were calling the zuckerberg tax, this idea that people who make huge fortunes in stock, but not necessarily realized, should be taxed on a mark-to-market basis. since we have an economist at the table and a politically involved one at that, your view? >> my view is we ought to be open to looking at adjustments

in the tax code. i don't know that this particular thing, that we're going to go tax capital gains as it's accruing rather than waiting until it's realized. i mean there would be a lot of practical issues with that. but i just think, we ought to be open to thinking about how the high income people are being taxed. if you look at the richest people in america, over the last 12 years, their tax rate has been cut in half. the amount of tax that they actually pay has been cut in half. and -- >> i don't think this is part of the problem. >> i don't think the solution is -- >> it's weird that in an environment like that, that they would decide, well, the guy who is 27 years old and just built a company, let's go find that guy. >> and by the way, the guy who is going to be the largest taxpayer in u.s. history in one year, to be writing a check like this, of $2 billion -- >> there's a weird irony, the republican nominee is probably still going to be a guy who is himself -- there's a lot of controversies about his own tax

return that he's got carried interest, that he's got such a low tax rate. >> less than 15%. >> tax shelters and trusts and all sorts of things. what i still can't get is for, maybe sam zell is one of the people. but for the people who believe that keeping high income tax rates at the lowest they've either ever been or they've been in 65 years, if that's such a stimulus to growth, what happens in the 2000s? they did it, we cut taxes at the top, by trillions of dollars, as much as they've ever been cut. that wasn't like jack's magic beanstalks, what happened? >> it wasn't sam zell's argument. we should make that point clear. that wasn't his argument. we were open discussing the op-ed piece in the "new york times," which is a very basic, going after and collecting these taxes as they accrue. which is weird. but you could very easily look at the capital gains tax as a way of rectifying this. >> look, the issue that capital

gains are only paid on realization, is an issue. there's just a lot of practical problems associated with things that are not liquid. >> the more interesting thing in the article, it refers to steve jobs, is upon your death, you can transfer your shares, because they're an asset like a home, to your spouse, effectively tax-free, no estate tax on it, you don't have to sell them. and when you do sell them, you sell them on a stepped-up basis. meaning whatever the value is at death, you're only paying on the incremental value that's created after the death. and that actually, i thought was actually an interesting point. that could be debated on different sides. >> look, i think that's right. i think you will find if you start poking into it, that's true, you pass it to your spouse, but then when your spouse dies, it's going to kick in as the estate tax would apply to that. the reason we, i think have basis step-up at death, is if you didn't, you had the farm and you pass it it's like okay, you got to sell half the farm to pay the taxes.

>> and that's the issue. >> let's bring in cnbc's rick santelli and steve liesman to talk about i presume what's happening in the markets today. rick, we're going to have a ten-year auction today. as we've seen the yield on the ten-year edge back towards 2%. >> yeah, what's going on with greece of course, the bailout needed because of course, they thought that taxation was an issue as well. they didn't believe in collecting it. so i guess both extremes, taking it all away or not taking any doesn't turn out well. and we're flirting with 2%. i think it's ironic that the boon is also identical same yield at 1.99. and this is going to be an interesting litmus test for the capital markets, to see exactly how europe in the grand scheme of things is keeping rates maybe a bit lower. and then you add in the central banks. and you know, all the issues of

the day. so i think this will be a fascinating session. >> you know, rick, the people that we talk to on the fast money halftime report for example seem to say this is a perfect environment not only for stocks, but bonds as well. given what the fed has sort of telegraphed that the environment is going to be of late. but then you see that maybe rates are starting to edge higher than there are other people who say you could see a rotation out of bonds into stocks if you get a little more pick-up in equities. it makes for a really interesting and fascinating debate as to which area of the market to be in right now. >> well, it does, about, judge, let's keep it real here. certainly a 1.70ish record low close for everything that we've seen the last you know, 40 years, here we are, what, less than, about 25 basis points or so away from that level, i don't know that this run-up qualifies. i would take the other side of the argument. that when rates really start to move because there's more

confidence in the world, and lack of confidence certainly isn't solely predicated in greece, it's the discussion that you're having right now. you know, how strong should governments be? should governments that never make a nickle take all the nickels away from entrepreneurs? all of these issues need to be settled. and there will be no discussion, when the capital markets feel less need or investors feel less need to be embedded in them, we won't be debating them 100, 150 basis-point moves that are out there at some point in the future. >> steve, you called this a sweet spot for stocks. >> potentially. when you look at the idea that bernanke has put a floor on deflationary forces in the economy, and bernanke, by the way, is talking about asset prices, he's talking about incomes as well. there's this, i think misnomer out there that you can have prices fall and not have incomes fall. bernanke's concern about deflation is equal on the asset side as it is on the income side.

people think about don't tend to think of those things together. and so it's mott right perhaps to say that he wants inflation. but if he had to choose a problem, inflation is the problem he wants to have. you know, i think of the pickle salesman down on delancy street, i should be so lucky. it's sort of like the metaphor that comes to mind here. i want to point you guys' attention to what happened yesterday about 3:00, we got the consumer credit numbers, they're going through the roof and there's a legitimate question of gettingite off what rick is saying, is monetary policy working? are we creating new bubbles? i don't know if they have the credit chart at the top. take a look at the spike atted end, 20 billion followed by a 19 billion increase. go to the next chart and let's look at the long-term trend on this. you can see we're down off the top. but inching our way back up to those peaks where everybody was concerned about where we were. now i want to take a look real quick at this is the question, is policy working. let's look at the real cost of money. inflation adjusted and for my

good friend, becky quick, i want to point out, when we do this, we include everything. this is the headline inflation number. that's how you create a real yield. >> food and energy. >> policy you might want to use a core number. when you look at a real yield, you can see they turn negative around april. what's happened here, and i'm just using the ten-year and the one-month now, that's not the cost of money to consumers, but perhaps this is indicative of the risk-free rate. it's gone negative. money is free, austan, what do you say when rates are -- >> money is free. >> now you have this response in consumer credit. and now you can have this debate. but certainly consumers responding to lower rates, maybe more jobs, feeling more secure taking on more debt and maybe they feel a little more secure borrowing to spend? but that's what's going on in the economy. >> that was part of the point of what we needed to see in economic recovery is the consumer to get back in there. >> the massive decline of consumer credit and consumer availability, you don't, you can talk to anybody, call your aunt, they will tell you, well, geez,

i can't get a credit card. i can't refinance, i can't -- i'm being restructured. >> somebody is loosening up somewhere. >> so i actually think it's relatively important. and then as steve says, you get into the discussion of is it going to overshoot? but if that continues, the fed will, the fed's, let's drop the rate to zero and let's do everything we can to, if we could, we'd drop the rate even further. the reason you have to do that is because there wasn't enough credit. if you see continued massive expansion of consumer credit, the fed will then have to start talking about what's the exit strategy. >> maybe it's not so much, it hasn't been the lack of available credit, maybe it's the lack of demand for the credit that was available the whole time. >> you're absolutely right, scott. >> so people weren't going for more credit. >> also on top of that is why has the interest rate declined? and i've had some people warn me, the u.s. is maybe a little bit complacent about its ability

to borrow so cheaply on markets. because the european crisis has depressed u.s. yields. and i think rick was kind of alluding do this earlier. what happens now if europe -- this almost sounds like it's a ridiculous statement -- gets its act together. and what would happen to u.s. yields. >> or even if they just weren't as afraid as they have been. >> right. >> but let's remember, the u.s., the yield is going to go up 300 basis points and still be below the average. in the u.s. so the argument that we should be afraid that interest rates would rise to what, to the 2% level, i mean is, we're in a really weird world. i still think the fed will have to be talking exit strategies, if this consumer credit keeps growing. >> when? >> it just depends -- >> not late 2014. >> if consumer credit grew like that every month for the next year, they would have, people would be pressing them, what is the exit strategy. >> gentlemen, thank you very

much. and steve, i want to congratulate you. you told us what you were going to talk about as you sat down here in the commercial break and austan laughed at you and -- >> not just austan, you all mocked me. >> you said you are our ratings whore. >> i said i wanted to talk about consumer credit and the real cost of money and andrew said, we want ratings. >> that was interesting. >> thank you very much. >> i give you credit for that. >> rick, thank you, we'll see you soon. when we come back, rick santorum making his case for the gop presidential nomination with wins in colorado, missouri and minnesota. we're going to talk it over with former minnesota governor, tim pawlenty, he is the national co-chair of the mitt romney campaign.

the the new spark cardnth from capital one. spark miles gives me the most rewards of any small business credit card. the spark card earns double miles... so we really had to up our game. with spark, the boss earns double miles on every purchase, every day. that's setting the bar pretty high. owning my own business has never been more rewarding. coming through! [ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet?

what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense.

welcome back to "squawk box." take a look at shares of chip maker rambus. they've been rising in the premarket trading. the company has signed a patent license aagreement with rival chip maker sh nvidia. the pact between the two settles all outstanding issues involving patents. >> rambus is seemingly involved in a patent dispute every other week. >> why? >> i don't know. but they always are. always. >> rambus is one of joe's old favorite stocks, right? >> i think it is. >> i can't tell you the number of stories i did when i was at nasdaq about patent disputes vafg rambus. >> big news on the settlement,

it looked like it was up 10%. next up for the gop candidates, the next stop is going to be maine. governor romney is still poised to be the next candidate for the republicans. but who is his biggest threat these days? and how much longer will it be a contest of four? joining us right now is former minnesota governor, tim pawlenty, the national co-chairman for the romney for president campaign. governor, welcome, thank you for joining us. >> good to be with you, becky, good morning. >> good morning. you know this comes as a bit of a surprise, hearing that mitt romney lost in all three of these contests yesterday. we knew that it was going to be close in some of these states. but the idea that he didn't come away with a single win, how big of a setback is that? >> well first, congratulations to rick santorum. he had a good day yesterday. but a good day and a good week does not a successful presidential campaign make. and if you look at these campaigns, there's one candidate who has got the capacity as a candidate and in terms of his

campaign, to go the distance when the nomination to defeat barack obama, that's mitt romney. obviously this is not going to be just handed to him. it's not a coronation. last time john mccain lost approaching 20 states, the fact that mitt romney doesn't win all the states is not exactly breaking news. it's going to be a hard-fought battle. but he's going to be the nominee and i believe he's going to be the strongest candidate to beat barack obama. >> i think that raises the question of how strong of a candidate he will be, if he eventually becomes the republican's choice to run against president obama. is this a sign of a weakened state? or do you think that this is something he can turn around down the road? >> he can definitely turn it around. the states yesterday, including my own of minnesota, were nonbinding caucus exercises. they were you know, obviously meaningful, but really only in terms of psychology or the punditry. it doesn't change the delegate count. the actual accumulation of delegates towards the nomination. it was a good day for rick

santorum. but look, mitt romney's campaign has the resources, the message and the best candidate is going to be some ups and downs. yesterday it wasn't a high mark obviously for the romney campaign. but he's still best situated to be president of the united states. and he's strongest in the polls, becky. he's got the best record of these candidates. when each candidate who has risen in the polls had their moment or weak or month of a surge, has been introduced to the country or to the republican party and then they've regressed back. and mitt romney has been the one person who has been at the front of the pack or nearly so, throughout. >> sure, those are all excellent points. but governor, in your own state, how come romney wasn't able to do better with your support? >> well, in my state obviously the state overall, you know leans democrat. but the caucus attendees within the republican base tend to gravitate towards the candidate who is perceived to be the most conservative. so ron paul had a very strong base there. and mitt romney's record is a conservative record.

but the perception, i think it will be filled in here in the coming weeks and months, that rick santorum is the perfect conservative candidate as he alleges, isn't accurate. but that perception i think prevailed in minnesota. a small turn-out, only 60 thousands or so last time out of a base of three million voters. so probably not the best barometric measure of how the republican party more broadly across the country will select their nominee. but one measure on one day, rick santorum won. but like i said at the top, a good week or a good day does not a successful presidential campaign make. you've got to go the distance. and mitt romney has the capability to do that. >> governor following up on becky's question. this has to be a setback in certain circles for you personally. for those people who think that maybe you are the wise choice for mitt romney's vice president. or his, you know, his running mate. do you look at it as a personal setback? how embarrassing is it? >> well not at all. i took myself off the vp

consideration list months ago. so that waeth a fasn't a factor. i've asked that my name not even be put on the list. i proactively removed my name from the list long before yesterday. so that's a nonissue. >> i want to talk about the economy for a moment and try to understand the argument that romney is going to be making in the next couple of months, especially as it appears, and we don't know, that the economy seems to be getting at least some of the jobs numbers are better. what kind of argument are we going to be seeing, especially because romney thus far has made the argument that the economy has been struggling. it's obviously still feels like it's struggling. but on a relative basis, you're seeing what some of the in trade numbers have done in the past week, given the jobs numbers. what is romney going to say? >> well he think the election is still going to be in large measure a referendum on president obama's performance relative to the economy. there's been some very modest improvement in some numbers in recent days and weeks.

and president obama's numbers have perked up a little as you've noted. but a couple of things, one is the economy still with that modest improvement is very impr anemic, to put it charitably. governor romney would welcome the election being a ref renn duren renndum. the forecasts going forward are best uncertain. you had a cbo forecast the other day that came out and said unemployment actually may go back up in 2012 and even if it doesn't, it's still at an unbearably high level. president obama's stewardship over this economy is going to be a huge drag on him come to the november elections. >> okay. governor pawlenty, i want to thank you so much for joining us today. we do appreciate your time. >> you're welcome, becky. thanks for having me. after the break, we'll get austan goolsbee's response to all of this.

we're also going to be heading down to the new york stock exchange for the latest buzz from wall street. "squawk" is coming right back. 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 ttd#: 1-800-345-2550 to you whenever and wherever you want. ttd#: 1-800-345-2550 which is why we rebate every atm fee worldwide. ttd#: 1-800-345-2550 and why our mobile app lets you transfer funds, ttd#: 1-800-345-2550 execute trades, even deposit checks just by ttd#: 1-800-345-2550 taking a picture, right from your phone. ttd#: 1-800-345-2550 so talk to chuck and put those barriers behind you. ttd#: 1-800-345-2550 our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor.

[ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet the people that made the machines. i had such an amazing group of doctors and nurses, it would just make such a complete picture of why i'm sitting here today. ♪ [ herb ] from the moment we walked in the front door, just to see me -- not as a cancer patient, but as a person that had been helped by their work. i was just blown away. life's been good to me. i feel like one of the luckiest guys in the world. ♪

welcome back to "squawk box." let's get down to the new york stock exchange.

david, melissa and jim join us. we're waiting on greece yet again. mcdonald's, i'm sure you guys are going to be talking about that. just a juggernaut. >> there was one guy looking for 9%. chipotle like growth from one of the largest chains in the world. in europe these guys keep delivering. incredible number. incredible number. >> at the same time, one must question the valuation at some point. it's reaching 20. at a pe. granted, the yield is high, 2.77%. >> but 700 basis points underperformance versus the rest of the index this year. so, i mean, it's kind of recharging. i go over panera -- we've had a plethora of restaurant change here. >> yum. >> goldman sachs. this is a great one. i don't want to take too much time. goldman sachs takes yum from a sell to a hold. value added. one of the greatest stocks i've ever seen. >> lots of other earnings this

morning. sprint, time warner, changes on the board at yahoo!. a lot of different things going on. a lot of stuff coming at us. >> and the ceasars will start trading today. what's your favorite line from "hangover"? >> did ceasar really live here? >> oh, man, andrew. you've got to go back and learn the line. >> he's a huge fan of the show. that whole cast, "hangover" guys, huge fan. >> can they consider trading? >> when does the lockup expire? 9:31? outrageous. sec, hello. >> all right, guys. see you in a bit. when we come back, final thoughts from our guest host, austan goolsbee. "squawk will be back right after a quick break."

 are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. oh! [ baby crying ] ♪ what started as a whisper ♪

every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too. liberty mutual insurance. responsibility. what's your policy? ♪ amen, omen [ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese.

by tomorrow. [ male announcer ] ducati knows it's better for xerox to manage their global publications. so they can focus on building amazing bikes. with xerox, you're ready for real business. welcome back to "squawk." want to give you a quick clarification on sprint's earnings. a one-time item of 8 cents a share should be excluded from its quarterly number so its per share loss is 35 cents a share. that was slightly better than estimates. no doubt as to why you're seeing the stock up in the premarket almost 1%. >> let's get quick parting sh is

with austan goolsbee. the romney tax issue coming back to the fore. >> yeah. i don't know. it feels like you saw the reports "new york times" in the that they're -- the things in the one tax return that he did release are things that obama had nominees that got shot down because they, perhaps, had the same thing. just feels like to me, i don't know if you guys agree, that if it's santorum, the blue collar guy, versus romney, the country club candidate, that feels like it's drifting back to the tax returns. >> has it become an issue about taxes? has it become an issue about private equity again? >> it might even be about private equity again. i think the tax -- the fact that romney himself has got one tax return, at least, which embodies all of the things that people are