will change, but i think that issue is secondary to the fact that private equity functions and functions well for america. hang paulson talked about europe, talked about the cumbersome decision-making process. there's something more, too. the europeans have a different mentality. we are problem solvers in general. they are problem managers, and it leads to effectively no resolution. >> we've got to leave it there. appreciate it, ambassador. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ it's a beautiful morning good morning. welcome to "squawk on the street." i'm melissa lee with jim and david. the dow is looking to add about 38 points. as for europe being abu yesterday by comments out of china that it will participate in solving the europeans debt

crisis, the dax gain, for instance, and the cac is also higher. tim cook speaking at a goldman conference says the board is actively looking at ways to use its cash hoard. kellogg steps in to buy pringles for 2.7 billion. we'll talk to the ceo this hour. a stunning beat from comcast this morning on its fourth quarter report. america is in love with broadband, declares the ceo, and we're watching singezynga. david einhorn, for example, shedding a new position it seems in research in motion. meanwhile, john paulson, the huge hedge fund activist in urging hartford financial to

spin off the pnc business. several issues yesterday, everything from working conditions in decline ease factories, to the company's cash position. here's what cook had to say -- it took us 22 years to sell our first 55 million macs, our first five years to three years to sell our first 55 million iphones, it took us less than seven quarters, to sell our first 55 million ipads. those are the trajectory we have seen in shares of apple. interesting, because in the journal today there's a story about how it's masking the s&p. a look at the corporate earnings growth. >> texas instruments spoke last night yesterday at the gold plan conference, and it's in the apple orb. if you're in, your company is doing well. if you're at, you're getting killed. last year at this time, jpmorgan

was talking about an ipad glut. it's looking a lot like the ipod means game/set/match from year 1. only player. only player people want. >> of course, the chinese don't seem to like it too much suddenly. >> they like the name. >> understood, but the chinese government lining up against you in any way, we know it can be fairly effective. >> crush you like a bug. >> you can't hope to go to the courts and get a fair hearing. >> chinese, chairman lynn, but could a raptor get his hand up in front of his face? that was like plays horse with that guy. i completely understand china. you need china on your side. we know from europe you need china on your side. it's the fulcrum of a lot of news this morning.

>> it could be a shakedown. >> it's not just the name. it's also these allegations that perhaps some of the apple's contractors are using improper labor practices. in fact, tim cook addressed that. here's what he had to say. >> we think the use of underage labor is abhorrent. it's extremely rare in our summer chain, but our top priority is to eliminate it totally. we've done that with our final assembly vendors that are now working down into the supply chain. if we find a supplier that intentional hires underage labor, it's a firing offense. >> a very deliberate in his choice of words there. >> obviously, you know, this is

something that we outlawed in this country years and years ago. china is much more lax in these things. andrew sorkin singing the praises of china and free trade. free trade to me means exporting jobs to china where they pay them less and pollute more. i don't understand what -- >> it's not a zero-sum game. many people think of it that way. it. >> peaceful coexistence? >> but it's not that there won't be significant tension. what is he -- >> he's the audubon society. you would think he would care more about clean air. >> if they have to raise prices in part to sustain higher wages and better working conditions among the people who put together so many of these devices, can they till extend the same consumer appetite at a higher price point. >> i've got to tell you, one of the things that china is faced

with is they have to raise how much they pay their workers, and then it gets made in vietnam. >> but it's totally different between iphone and a shirt. apple could faably eat the margin on that and still make money. >> i agree. i would say, one of the things i would point out is there's a huge amount of margin in apple even if they started paying people. it's such a juggernaut, going back to your point that it's obscuring the whole market. we -- we haven't talked about hewlett-packard in ages. what are they up to? >> we'll find out next week we'll report earnings i think on the 23rd and meg whitman will be or guest, so you'll have the opportunity to get some questions answers. talking about chips, let's move to the ones made out of

potato. about $2.7 billion for pringle's. both companies mutually decided to call off that deal, and here we are now. you've been saying for a few days, maybe weeks who they'll sell it to. they found a buyer. >> and kellogg has a burgeoning snack business. if you go to latin america, and i happy to love to go to mexico, you do not buy potato chips. you buy pringle's, and that's a huge powerful brand overseas. kellogg is probably the most international of food companies, not nestle's, but domestic, maybe even more than heinz. protecter needs to be able to raise some cash. i think protecter -- i've been critical. kellogg needs this growth.

new ceo putting in the implant saying we're not content with our growth. >> there 1.5 billion around the world, that's pringle. that's staggering. >> it's a significant brand. >> and protecter has starved that brand for years, trying to compete against some of the companies like colgate. they have not not backed pringle's. do you remember the ceo of diamond, the former ceo i'm thinking he's in witness protection -- just joking, just joking, but i feel very stronging thats plan for mendez and diamond foods was to put a ton of money behind it. kellogg -- who knows -- -- why are you laughing? >> did you see that -- >> of what? >> did you miss that? >> of pringle's? the manufacturing of pringle's.

>> i think it's further on in what we've cut here. i was just mesmerized by all those potato chips. >> you should go to a frito-lay plant. >> look at all those. white house. i went to the frito-lay proving ground in aberdeen to see them making healthier chips -- >> it's amazing. >> it's amazing how strong they are that they can go through the tumbling actions. >> can i compare that to ireland and israel plants that i've got to that they -- and much higher quality. >> should we talk about comcast at all? >> a strong internet video subscriptions helping comcast beet wall street with the estimates. the nation's largest capable company boosting dividend by 44% and announcing a $6.5 billion share buyback.

there are few holes in this quarter, yeah, but very few. >> in fact, hardly any. the focus is on the lack of subscriber losses coming into the quarter there had been an expectation of may -- you only got 17,000 viewer, let's call it even flat. nore what that means. is it a read-through into housing for some way, not necessarily people buying, but at least rental units. who knows, hooking up your cable? and then of course the big increase in dividend, all looking pretty good, makes it nice and easy to talk about comcast. >> obviously we work for -- i do want to point out this cord-cutting nonsense, and i'm calling it nonsense. when people are doing well, they don't stop with video. barry diller this morning, talking about a new product that will cut the cord.

look, it didn't happen. >> oh, no, i think it will happen. >> do you? >> absolutely. >> that's because you have that awful company that doesn't let you see the knicks, right? >> that would be time warner cable, and we're hoping though glen britt, jails dolan sit down, i'm happy to work with you. i can't get vios if i can't, i would bring simon back from retirement to hook it up in my house. and i'm not going to a bar every night to watch the game, with my 9-year-old boy, but in terms of comcast, very strong. in terms of cord cutting, i think over the longer term. >> will we be sitting here in seven years? i have no idea, but we're talk -- >> sunrise senior living is

beckoning me. that i think is the -- that is the game maker. >> "squawk box" actually spoke with brian roberts earlier today. here's what he had to say. >> we had a great quarter on x finity products, which are high-1350ed internet will a fab russ quarter, better than 2010 by over 10%. this is a product that's been out there for many years, to still be growing faster than the year before. it's the sixth straight year. i think america is in love with broadband. >> i love broadband myself. >> on the whole cord-cutting issue, broadband is the high-margin product. the fact is year capable provider goes to the content providers and basically just -- i mean, they maker a margin, but it's much more important. >> people love cable. we've got to go. we've got to go. why? we have john bryan coming up next talking about the company's

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welcome bulk to "squawk on the street." january industrial numbers, unchanged on industrial production. that's a bit of a disappointment. but last month we revised an originally reported up 0.4 to up 1%, so disappointment on headline, much better on the

revision, capacity utilization a different story, pretty close to expectations, coming off of 78.1, that was rise to 78.6. these are the best levels really hovering at the highest utilization rates going back to mid '08. while those data points are coming out, we see yields moving a bit lower. back to you, melissa lee. >> thank you very much, rick santelli. first on cnbc on the news line is john bryant. >> good morning, melissa. >> jim cramer was making the point that pringles had been a brands long staved of money and investment. will you be ramping up? >> we will be investing behind this business.

it nearly triples the size of our international is snack business. >> all right. you say critical. why? >> another avenue of growth. it takes the kellogg company from the world's largest second largest bisque company. >> why were you in there earlier? this thing heart there for sale for a while. given what you've just said about how critical it is, why wrge of gidget the deal done -- >> the big obviously has been in transition, in limbo. when we had the opportunity, the opportunity arose. >> but, sir, there was an opportunity to pay much less for it at one time, wasn't there? >> actually the diamond deal would have been a higher pam than what we're making to do

this deal. >> that was because of the stock price of diamond. i'm trying to figure. >> that's -- the diamond deal was a tax effective deal. so p & g had a certain requirement. we would have had to pay more than we are paying now to make it up. >> very good point. this is just a dynamite brand overseas, right? how can you reinvigorate it in america? >> be think it has great growth potential. this is has been -- we're going to focus on driving this, we think p & g did a good job, but clearly they're -- >> does pringles in the hole overseas, does that help pave the way for your other brands?

does it increase, for instance, and therefore you can put more keebler, more cheese its out there is it. >> it does. >> which gives us economies of scale. >> let me ask you, this is an imprint ceo and you're making major stains, are you if concerned that post will take away market share? >> we have a great cereal business, we just launch ed and we're confident in the strength. >> how about raw costs? we have the bag going higher? are you able to control the costs going forward? >> we do everything we can to save money, and when we have to,

we take pricing. >> you know, in terms of the decision to suspend the repurchase program, why is it? you don't want to lever up too much? you're obviously borrowing $2 billion to get this deal done, but give us a sense of your strategy. >> we want to maintain flexibility, so we can continue with great opportunities like this deal. >> does that mean you're looking for more acquisitions in this face space? >> there's been a lot of questions about your implementation whether it's too delayed? that had been a sort of contention. >> we have made a lot of progress over the last several months and feel good about the improvement in our supply chain. >> so you believe the estimates so far and the -- you're on board with that? >> i haven't seen how the estimates have changed. we feel good about this

ecsession -- >> and going back to the notion of expanding your footprint by leveraging pringles presence overseas, john, give us an example of maybe an item that you currently have that could benefit from pringles footprint. where will you put, for instance, keebler snack where they don't exist already? what countries? >> it may not be keebler snacks. let my give an example. special k cracker chips, one of the biggest inovague in the cracker aisle for a long time. the special k brand is strong outside the u.s. this gives us an opportunity to leverage that brand outside the u.s. >> has underspent on the frito-lay division. are you going to go toe to toe with pepsi frito-lay to take aisle space from america's supermarkets? >> we'll play in the areas where we're strong, and yes, we do --

we're going to play our game, invest in our brands, and provide greater innovation. >> when do you expect to close the deal, john? >> sometime in the summer, hopefully by june 30. >> thanks very much. very exciting transformational acquisition. >> and the stock looking up, which is again to the largeers m & a -- >> this company has needed to grow. this ceo is making it grow. this stock is a buy. >> wow. >> even up 5% it's a buy. >> yes, this is a new kellogg, i like it. and i think going higher. when we come back, get ready to run. take a look at futures on this wednesday morning.

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live from the financial capital of the world, five minutes to the bell, so cramer's mad dash. if it's at the expense of whom and do you not like that company? >> i hate the cereal business. it has really been one of the biggest battle grounds. they've done buy one/get one, and there are great managers in cereal. ken powell is fabulous.

the think the battleground will be against frito-lay. >> so pepsi, and kellogg -- >> but they'll step up spending. she's the ceo. diamond foods, they can go right after those guys, too. it's aisle space. >> before we hit the bell, weight watchers this morning, not a great quarter, very interesting decision to buy back as much as 25% of the stock. wtw is what we're talking about. how much worse would it be were they not instituting a dutch tenders. >> this is the breakout quarter. this is when you say i'm going to lose weight, when charles barkley was recommending -- it didn't work. >> the numbers are not good. the outlook is not good. >> and when have you seen this

last? the decision is basically levering up the country and hope ultimately we do okay. >> and the range is as low as 72. that would be significant down side. >> when you look at that miss, flat revenue versus plus seven? 77 cents in the future versus 1.13 that people are looking for? this is obscuring what i regarding as a major decline in the business. >> you want to talk zynga? >> man, you know, they come back, the to be deserved -- this is a $10 stock. the peg ratio, the multiple here is absurd. the fact is the conference call -- this is one of those you have to listen to, because it basically said, boy, did you

guys bag up. >> is it a sign of some sort of seminal decline? >> i think this is one of the most perfectly timed ipos i have ever seen. it looks like they're in decliner they're going to say we have these new games and don't worry about it, and make when facebook becomes public you'll get a second waive. >> it's also important to keep in mind they had a huge run-up when facebook filed, and it's simply returning the stock to pre-facebook filing is not a crazy sell-off in that context. >> people got excited about zynga, if this stock were 10, we might be talking about it going to staying at 10, going to 11. >> right. yahoo!? >> yahoo! yes, a lot of the news

was out yesterday, that being we shared it with you. not going to happen, at least any time soon. stocks have broken down. later in the day dan lowe comes with four challenges to the board of directors. two guys just put on who were going to replace those coming off already. if you're a new ceo of yahoo! as mr. thompson is, man, that was not a good day yesterday. >> what a distraction. >> what a distraction on all those fronds. >> and they have to really focus. that company i think is earnings per share challenged. and google is so aggressive. karen finer man had said this is sort of maybe like a stuck-holders situation, whereas it's very difficult to do anything -- >> but david, you have said over and over again this is a huge market cap company.

>> it is $18 billion. you heard the closing bell. here we with the opening bell. also fear at the big board. educational toy maker leapfrog enterprises over. >> green mountain roasters, very controversial. herb greenberg has founded this over appeared over again. head to head to decide on the second quarter. which do you like more? the flavio or cure ig? keurig. let's talk about dell. stern sterne agee does not like the stock. >> he's made 17 acquisitions. he's got to have a low-margin business. i think this downgrade is premature. >> maybe this whole notion of a

transformation of the business is premature as well. 70, 75% of the business is tied to pcs directly. maybe it's not moving fast enough given the run in the stock. >> i think it's confirming that michael dell has decide to go another way. did the stock run up -- it ran up so far ahead of the rest of tech, i think it can pause. tech is incredibly cheap away from apple. when you look result how technology is doing in the marketplace, thinks stocks are historically very cheap. they really are. they're just imbued, flowing with cash. i like that group. >> david iron horng initiated a position with dell. >> there you go. >> let's do a little trade

school here. that's what we call it on "fast money". it could be part of a positioning in the option strategies against it. >> we don't really know. >> and there's only a couple guys that i look to. wells fargo warren buffett increased -- and that bottom may have been indeed been caused by the other paulson i do believe it was clearly oversold. that was 64 million shares even though it was downgraded again today it just shouldn't have ever gotten down to where it went. >> it never should have been up

$5 in the if i were? >> i think so. remember -- i happen to be a much bigger fan of wells fargo, and jpmorgan is substantially cheaper. that's not right. jpmorgan is very well run. >> i'll bet if we throw up a chart of apple, i'll bet it hit a fresh high. >> you know in the '80s i used to joe pep -- well, sure pepsico -- apple is gapping up, because it's going to earn $55 a share in 2012, i believe. cook is -- is talking open by about re-deploys capital. apple still has it in the mind of the retail investor. >> and he says they're not religious in terms of how they use that cash. >> you know i'm out there, i sure don't want them to buy zynga. i think this company we're

talking about the itv, how big, the ipad. look there's so many other i pads, what happened to them? they were called tablets for a while, now they're called ipads. they were called music place now ipods. let's check in with david, wlos with bob pisani. >> we haven't talked europe, so when we get to you, mr. pisani, we know we will, let's start there. >> i take my wife out last night for valentine's dinner, futures at 1347, i come home at 10:00, and futures are 1357. this is very thin trading in those hours, asia really hasn't opened quite yet, so i check around, say what happened? ten points is a lot. chinese governor of the people's bank of klein says in a meeting, yeah, we'll continue to buy euro zone debt. sure. that's a bland comment, but it moved futures ten points.

you say how could that be? the chinese have made these comments before. this is not new. yet it did. myopoint in bringing it up, this is the grip that europe still has. people keep saying i'm sick of greece and the eu, a lot of people does, but look what it does to the market. 11:00 a teleconference call and still the greeks haven't delivered anything. we have nothing. >> really nothing. >> nothing firm. >> any expectations in. >> yes, three things. now, the greeks have made comments. they found out how to do that. we'll see. we still don't have it in writing. secondly, still not clear whether they'll deliver letters from the leaders. there are conflicting reports that such letters have been written, but we don't have them.

that's the point. weapon people chasing around looking for comments, but we don't have anything in writing. all of this uncertainty we're still going to the wall every day. >> we still really have nothing firm. >> you want to add to the confusion? there are reports now that they're trying to figure out some way to split the money they're going to send out u. maybe in pieces. of course, the problem is this 14.5 payment. they don't have it. is there a bridge loan of some kind? >> how many private bondholders will go along with it? so many ifs as we get closer and closer to march 20th. >> i guess the question is -- go ahead, jim. >> i think one of the things we have seen is a dramatic decline in bondholders. imf and eu in charge, they can take the hit. >> that's a good point. >> remember, they have bought into this at considerably lower

prices. they're not buying it, they're buying it at 40 cents, maybe even less on the dollar. the answer is this drama is still going on, and we're waiting for it to be resolved. march 1st is the eu summit meeting. >> like -- i like to keep track of all my summits. >> by the way, i want to mention one company. yesterday we talked about mascogen. these home building stocks, building material stocks are up 50% on expectations of a turnaround. today we heard from another great company in this area, owens-corning, they do fiberglass, roofing, all kinds of building material. another good company to watch. their numbers, too, were well below expectations. >> i like them very much. they did give, like masco -- they did do a very good forecast for later in this year. i think o.c. has been distinguished as a well-run

company. masco, i was flabbergasted. >> most of their sales are in the united states i great margins have been under pressure. but the point is, we're still not seeing a big case of a turnaround in housing. they said the same things as masco yesterday. mile concern they go up 40% since december when the stocks all started moving. how much more room do they have to go? >> i know. i thought the group, the business would be stronger. you're absolutely right, the core business is not tronger. >> have we seen such a run in there? >> it looks like that could be a

right call. i still hold out hopes for the foreclosures deal and second half stronger. and that's too low. there would be demand. >> those comcast numbers, they were due to a lack of subscriber losses, but household formation may be at least one part of it. longer term for the housing industry. >> let's hope -- not just for the housing industry, but for comcast as well. housing formations have been terrible for the last three years, well below the historic norms. >> birthrate has been minus 3 in this country. we cease to grow. i wonder whether that's -- look, a lot of that could be immigration, too. we have really cut back on immigration. back to you guys. >> scott nations as well as cnbc options action contributor. you're looking at fancy things, saying essentially the s&p 500

right now in your view is over bought. so what do we do? >> with the rsi, the relative strength index, it's absolutely overbought. it closed yet just a tiny bit below 70. if you look -- a double top, you understand why. the market is having a bit of trouble, despite the fact that china is so confident that a greek deal will be done. it's great that china is confident, because it seems like the greeks aren't confident that a greek deal will be done. so s&p a bit of a headwind. as it moves sideways. that would relieve the overbought situation. the one stock that i'm looking a the today that's disappointing is deere. great numbers, you this be forecast lower commodity prices in the following years, and we know it's hugely priced to the cost of commodities. my trust had to blow out deere, because theirs forecast was not

great, this complex fertilizers stocks are week, some people feel that ag has peaked. that's not my view, but some people feel it's peaked. >> not only does the rsi indicate -- but the vix is slowly creeping higher. >> i think it shows that people are worried if it -- and they might be willing to sell -- scott nations of "nation shares." there's a decent amount of activity, but not a lot of net movement. rates are just slightly higher than yesterday. if you look at foreign exchange, there's definitely more intraday

activity. looking at a euro chart, you can see we have gone from basically highest levels since december to the lowest levels in about a month, and if you look at the dollar/yen, remember yesterday the dollar/yen, the dollar again the yen yesterday was at a six-point high. peter boockvar, thank you for drawing my attention. it was a bit light, but here's what stood out. if you look at china, they have pretty much were a net seller of close to 32 billion in treasuries, and if you look at their overall holdings still large, 1.1 trillion, it's still the smallest position in treasuries they've had since the spring of 2010. back too you. thank you very much rick santelli. along with these filings, we discovered that john paulson is taking an activist approach when it comes to hartford financial. >> the largest single

shareholders, talking to them for some time. apparently talk wasn't enough to get them to consider spinning off the pnc business, so he's become an activist. not something you often see from him. he's not unfamily with this terrain, bum we don't see him that often -- >> there's some liquidation, property and casualty business apparently a clean book at hartford. people have been telling me it's worth 30 to $34, so you have a very clean division that is maybe worth more than the company. i think paulson is right. >> one would have to believe given he's been there and having conversations for some time, it's not like management wasn't aware of this. >> i haven't done a lot of reporting to understand why they would not have gone down that road. >> i think he's trying to get it sold. remember, we had a big wave of property and casualty buys before the turmoil, the tsunami.

>> you look at the shares, the weakness at the ends of the year and we're starting to get answe answers. >> never forget when you get that redemption letter, it's a frightening her, and it says you have to blow out things that you loveisms. coming up the fed after dark? some tweets you won't want to miss. plus is the novelty of the iphone wearing off? take a look at this morning's early movers on this wednesday on wall street.

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call them fetish. >> my love is elastic, my commitment too big to fail. >> i'm going to extraordinary measures to increase your still lug. >> i'll be your love of last resort. >> i like the way your yields curve. >> i like our voice guy -- >> it's a little creepy, right? >> i would have much rather heard barry white. >> those tweets were in honor of valentine's day yesterday. we'll meet the inspiration straight ahead. but it's this hashtag -- whatever you call it in twitterland. >> i used to call it the number sign, whatever it is, fedvalentine started the whole thing. at "mad money" we delivered

a valentine to ben bernanke, with a guy dressed in a bull outfit, had it online. just a pointless exercise, thanking the great fed chairman, who i still believe has done a great job. >> to this costume bull person went to the fed in washington and they got past security? >> no. in fact, nowhere. >> he didn't get the actual -- >> no, no, just subversive, no, it was just for effect. >> cramer, six stocks. take a look at the currency trade this morning. ♪ i'm bringing sexy back er graves sr., pioneer founder of "black enterprise" launched in 1970 as the first

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simon hobbs down on the floor with a look at what's coming many. simon? >> good morning. we're going to talk what did cookie say about apple television yesterday. back to you. >> did you just coin that nickname for tim cook? cookie? >> yeah. >> you did. i'ming, see you in a couple

seconds. six stocks, 60 seconds. dr. pepper, snapple posting a rise in fourth quarter profits. look at. i think they're on fire. >> ebay added to the best ideas. >> i think it's the whole -- >> abercrombie & fitch. >> lower number enough to beat them. and a recovery in 2012, that's not bad. >> if you can forecast what they're going to do, forget about it. >> beating estimates, also -- >> acquisitions, i really like that. >> and one of the best performers, fourth quarter profit beating estimates. >> down and this horizon brand may be finally working.

for more go to sots.cnbc.com. let's look -- wow, michael kors up another 3%. 3%. >> this saks business, the outlet business, people forget, this company could double -- it's still in an infancy. an exit interview yesterday. the chief creative officer of michael -- >> i always wanted to be the chief creative officer of something. >> you are of "mad money." >> but i wasn't one of the people asked to join the yahoo! board. if you're scott thompson, the new ceo, they put out a statement in response to dan loeb with four nominees, he wants to replace the replaismts, it's disappointing that he chose

a disruptive past just as the company is moving forward. i don't know what's going to happen there, but this cannot help the disruption. he says it's not enough, the guys are not media savvy enough that they put in there. more of a turnaround. >> you're looking at core business just doing so badly, i don't care who is running it. >> you may be hearing reports that -- it's unclear that yahoo! is wanting to talk about a taxable deal. still being able to raise some money, but not nearly so much. >> we keep thinking there's going to be a deal. tonight on "mad money"? >> this is really important. people will be talking about, they have an undisclosed oil

find. i'm going to try to find out what that's about. >> 6:00 and 11:00 tonight. don't forget. meantime, coming up, how starbucks found itself in the middle of a gunfight and news on american real estate. the big board, take a look. in absolute perfect iphysical conditioner, and i had a heart attack right out of the clear blue... i'm on an aspirin regimen... and i take bayer chewables. [ male announcer ] be sure to talk to your doctor

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welcome back. i'm diana olick, with breaking news. a big jump in homebuilder confidence from 25 to 29 on the national association sentiment index. this is the highest level on the index in more than four years. home builders confidence has doubled since september. the chairman says this consistency suggests that the housing market is moving toward more sustainable growth. he does, however, caution the housing is still fragile. of the three index components, sales expectations rose five points and current sales rose five full points. mortgage applications weekly show a continued reify boom, but

applications to buy a home continue to fall and are significantly lower than a year ago, so you have to take all this data with a grain of salt. simon? >> diana, thank you very much. about an hour into trading, we go higher in asia, higher in europe, but we fail to get traction at the open. have a look at the commodities this is important for gasoline prices. you'll see we are higher, 1.24 higher. that is absolutely critical. we'll explain that in a moment. a few other stories, berkshire harp away, the 13-f filing showing buffett adding to his stake in intel and cut his stake in kraft foods. iran saying it will cut exports to six european countries in response to sanctions lastly

this morning, deere reporting its first quarterly earnings rising -- i beg your pardon, presented the quarterly earnings rising to $533 million. sales also increased about the quarter. the shares, as you can see, are currently in negative territory. let mets explain where we are on europe at the moment. very briefly, what's unnerved people is a very detail report from reuters about why that meetings that starts within the hour they may not sign off on this package. what they're saying, and the discussions are intense, yes we can pay the sweeteners, and pay for your money in march, but our concern is if we do that, then the psi, the debt swap won't go through, therefore thinking of stepping right back. that is what is -- >> until after the april election -- what happens to the march payment? >> it's a standoff.

it's a negotiation, a standoff, but it's a political risk that they get this wrong, importantly, the man who may be the new prime minister after the elections, he wrote the letter with a major caveat that they may have to change everything, so it's a standoff. it it's the uncertainty that matters this morning. >> if everything is postponed, what happens to the march 20th payment that's due? >> the intention is they will not force a disorderly default. probably they will borrow it from money that hasn't yet been paid out from the first bailout. they think there's wiggle room there. >> that does not sound workable to me. gartner out with an eye-catching report saying it sees apple's market share slipping as the initial 4s

appeal slims down. we have an analyst here with gartner research. great to have you with us, berth that. >> good morning. >> could part of this be there's an anticipation for the next great iphone out there? >> well, i think we definitely -- quarter over quarter, we'll see a declining sale, and, you know, from delayed purchases of the 4s, and this will not continue this quarter. there will be some anticipation for the new device, and also the possibility -- you now, the launch of the new iphone will steal some attention out of the iphone as well. but we do believe that from performance, we continue to be strong because the ability -- will lighten and this will have amle to continue to perform

strongly. >> you're saying they may not be able to repeat that. the overall picture is a phenomenal take-up, a gain of 43% year on year. therefore, isn't your analysis of any slowdown in that rapid sales at apple dwarfed by the more macropicture of the smartphones? >> i think that what you will see also is that much of the growth that will come from 2012 will also come from, you know, the lower segment of the national market, which is the segment where, you know, apple is not really a complete match, and much in 2012, we are seeing some of the smaller players, very aggress erv, more of the

droid marketplace coming up more strongly as well. >> one of those players means the focus has been on apple as it once again today hits a fresh record high of 519-46, but the story here is samsung eating into nokia's dominant position action does that seem like it could continue? >> well, i think that nokia has always had an advantage because of that i penetration on the american market. and obviously something is very weak there, but definitely for on the percentage -- from the debt decline actually, so definitely is catching up, and we can see from the latest share that it will also need to maintain, you know, the high

pace that has established now as well but it is moment, a stronger nokia, but with that windows phone at the end of the year. >> roberta, we're going to leave it there. thank you. roberta cozza, the analyst over at gartner. first quarterly report as a company, the online game maker reporting net loss. shares as you see down over 10% right now. mark may, analyst at barclays, covers zynga. i understand that some of it is simply the weak bookings outlet. is that true? >> yes, you take into context the significant run-up the stocks had, combined with the 2012 guidance, which was just in-line with the consensus estimates, below the

expectations at the low end of the range and management characterized its guidance as being back end weighted, so i think that's contributing a lot. >> some people are characterizing the conference calls ago having been a bit confusing. would you agree? >> i think the companies first quarter on the earnings call, you know, i think similar to groupon last week, investors would like to have more disclosure around metrics, and that was one of the areas of pushback that we've heard. >> mark, you cut your estimates, raised your price target to $12 a share. can you walk me through how you get to that, cutting the estimates but raising the price target? >> sure. the estimates are relatively unchanged. we did raise our target by a dollar. that's primarily taking into account the fact that the comp group and the market multiple in general has risen since we last set that target, but from an

earnings perspective, kind of unchanged, a little higher multiple. >> how comfortable do you feel about saying that? by basically saying the markets trading on a higher valuation for any given earnings, and therefore we're raising our target. that doesn't seem like you have a clear sense of where fair value should be. it's a movable beast. >> the way we technically set our price target is looking at the market as well as slewly the company's long-tern earnings potential through a dcf modding, and taking those two on average is how we set our targets. i agree you want look at relative valuation, you want to look at the company's own earnings and cash generating power. on that basis we feel comfortable with taking the target to 12, which clearly is below where the stock is today. >> yeah, clearly. all right. 345rk, we're going to leave it

there. >> thanks for having me. still to come. amazon.com's unit could see launching a new business adding to the long list of specialty retail products offering that are exclusive in many senses. is the company looking to venture out and into physical stores. we'll be joined by the founder and kreismt on the of quidsi, next. 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

to bes to watch, about 45 minutes into trading. metlife, topping estimates, revenue slightly short. footlocker announcing a 9% dividend increase as well as a repurchase program. a lot of that going on. the price target, that is having a bit of a negative impact on the toy maker's shares. it started with diapers.com, but one of the fasters growing e-commerce companies is

expanding. mark law is the ceo. and joins us here. >> good morning. >> the flagship was diapers.com, which is everything for baby. then we launched soap.com, which is basically online drug story, wag, yo-yo recently a toy store. we have a beauty bar, and now today we launched casa.com, 35,000 home products, everything from bed, bath and beyond. >> i think i've heard that one. >> you were bought by amazon. why maintain these other names, web sites rather than kind of nodding to amazon each time? >> we're focused on the mom demographic, and our mission is to make moms' lives easier.

>> if i'm a mom and want to buy diapers, soap and facial lotion, do i have to log into each individual? >> that's the beauty of the platform. there's a tab at the top, so you can shop on one side, have a personalized shopping experience, click over and it's the same shopping cart, same account, so it makes it seamless. not seven interference from amazon? >> it's been a great relationship. >> what do you get out of it? >> yeah, it's been great. they provided the capital resources. we learned a lot from them over the past year, and we're able to carry our vision out prior to the acquisition, just more certainly and faster. >> what was the vision? >> the vision was to create and be in every category of products

with specialized personalized web sites geared to making moms' lives easier. >> what has this brought to you in terms of sales? diapers probably one of the biggest sellers on the internet. are you. >> sales have been growing. that was our first that we launched. it continues to grow. it's a big business, and, yeah, we compete on service. >> how is the amazon prime -- where you obviously paying and you get free shipping. we had a report yesterday that actually there aren't as many subscribers potentially at amazon as we thought. how available is it to your business? have been disappointed by the degree to which it -- >> we don't deal with prime, that's specifically to

amazon.com. we have our over delivery system. >> do we have to pay for shipping? >> free shipping over $49. here's the key. it's two days or less. about 70% of the company gets overnight free delivery. it's a high premium service. >> are you competing on convenience or price? >> primarily convenience. it's a personalized specialized experience. >>. >> so if you have the stock -- it must be -- >> instead of a physical retail store? >> it's working well. we have a leverage from a fixed infrastructure. >> are you tempted by a physical store? >> no, i'm not tempted. >> i'm just happy we're out of the diaper stage. i'm sorry. >> thank you very much. >> thank you. a little while watching.

did you follow smart money's footprints? iron horng, buffett and many more. stay tuned.

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the euro initially traded higher this morning but euro already retracting some of those gains. where does it go next? time for our "money in motion" currency trading. todd, i know obviously from the show that your focus is on the technicals of it. in terms of the technicals, where does it look like the euro is headed. >> i think people have tried to pick the stop of the euro, and right now i think is the

opportune time. you want to go short? i think now is the time. it's -- it's going to act as a target to sort of test that left. fundamentally speaking, i think there will be things that start to contribute to the push. obviously the first contraction, the european financing minister meeting was canceled, pushed to the regularly scheduled meeting on monday. timely i think what's going on is the market got a boost from china stepping in to finally buy -- but i'm wondering if that may fall by the wayside. i think it's a sell. >> so you're looking to go short, around 1231 or so? what's your levels to the stop loss and take profit levels.

>> if traders want to go short, they can do so around 130/60. and then look for that technical push through that key level of 1.3030, and also it is psychological level. i want to play an overshoot. this is a short-term trade. longer term i think we're on an up trend. this is a trader's move here. >> it's quite a dangerous trade, isn't it? isms you know what's interesting, simon, if you want to be short the euro, it's okay, i think -- the reaction was better seen in the australians currency, the new zealand currency. >> they're on a diplomatic mission may not. i may say it's a bit of lip service and a better fade than a trend trade. >> good to see you, and we'll see you on friday. 5:30 p.m. eastern time. if more education about occurrence sis, go to

moneyinmotion.cnbc.com. breaking news on oil inventories. and we talk the garr northwesterly headlines. up next we're talking part 2 apple -- will [ leanne ] appliance park has been here since the early 50s.

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. we want to talk a bit about the light square adventure, and what

could be a real potential problem for the company, and spectrum owned by lightsquare. phil falcone's effort is central to his hedge fund at this point, an opportunity he saw to provide spectrum and provide wireless services more broughtly speaking, but one that's run into significant opposition from the fcc as a result of opposition from gps operators who say the signal was overlapping on their bands in terms of spectrum. the question now, of course, is what will happen not just there, but mr. falcone. he's run into no shortage of problems at this point it's illiquid. he's also under investigation as we know from the s.e.c., having received a wells notice one has to wonder what the future will be.

>> he had already seen redemptions, would you know, i would think that usually you has been seismic like that, you want your money back immediately. >> we do. there have been redemptions we've been examining, and people have been wondering how significant they would be. interesting to point out, by the way, on the public market side of think clearwire shares are up about 5%. that is another company out there providing wireless spectrum, and 4g hoping for services, but given that lightsquare may be taken out as a competitors, and they say they're completely looking to find a solution to the problem and they say the recommendations are flawed in terms of the conclusions the fcc has reached. certainly his world has gotten tougher since a great trade, of course, regarding mortgages, similar to the paulson trade back in '08.

>> what did you think about the -- >> you mean the 13-fs? we talked about einhorn and -- >> and -- >> we talked about that earlier. that may be one of the reasons why bank of america shares were weaker than we might have anticipated. we also talked about gold, he was a big holder. of course, one of the keys is paulson suffered enormously, and yet they have rebounded sharply. >> el had missed they rallies. >> yeah. see what his numbers look like. >> let's check with berth that coombs. >> the oil inventory numbers are due out any second. overnight slightly bearish numbers. they had a build of 2.9 billion

barrels of crude. the expectation is for a build of about 1.5 to about 1.8 million barrels or so. actually we have a drawdown of crude. 171 million barrels. distillates done. we saw a build of only -- so we are seeing crude numbers move higher. what's interesting is this contrasts with the -- yet which showed an all-time low in terms of gasoline consumption in the prior week with consumption demand down about 3%. 5% year over year when you look at the four-week average. one of things keeping attention in this market is the supply disruption concerns with tensions continuing to rise with

iran now saying it would cut cut off six european countries early. the countries said they would stop buying oil from iran in july. these numbers better than expected, david, are certainly going to help keep that to the up side this morning. back to you. thank you, bertha. let hayes touch on the ongoing pain at the pump. gasoline futures over the last month have skyrocketed, up 11%. the american automobile association reporting a national average for a gallon of gasoline is now $3.51. that's up 12 cents just in the last three weeks, of course, the key questions, are we going to see that start to hurt consumers. >> he's at the cme group. gary, good morning.

>> good morning. >> i guess in terms of explaining where we are on gasoline we should identify it's the link to the brent, the links to the london train, if you like that's important to people than arguably wti as things stand at the moment? >> there's still a lot of people driving. i'm seeing the prices going up on a day-to-day basis. one of the things i'm looking to, is we're seeing the refineries are slowing down. they're exporting more petroleum products. they're not refines the gasoline here we need to keep our prices down. that's probably pretty much really what's controlling it right now. >> where do you think prices will go? ivities right now we're looking at the $3 range on the march r-bob. which means at the pump we'll see $4 at the pump within the next few weeks unless we go

ahead it refining turned around. >> with everybody going on holiday for easter you'll see the prices go up at the airlines. people will be paying more to the gas on the road. people got to start pulling back a bit. they're not going to be able to make that $4 and change per gallon week in and week out. >> at the same time, gary, are you forecasting that perhaps consumers acceptance of higher prices, in that -- the point at which they start curtailing their usage is even higher simply because we've had such mild weather across the country, maybe consumers are paying less to heat their homes this year? >> again, i just like to look back at the refineries. i don't know. i've got to put my finger someplace, and this is what i'm recommending. they're definitely going to crank up the prices.

we need the maintenance. they're doing it a little earlier this year than normal because of the light weather conditions we've had. thank you, gary, from united futures in chicago. back for the 13-f filings out yesterday. brian sullivan is back at headquarters with the lowdown. brian? >> thank you, one of my hobbies is going through 13-f filings, and that's what we did last night. let's start with perhaps the most followed, berkshire hathaway. as of the end of fourth quarter, six weeks ago, but it's our rare insight, berkshire taking new stakes in davita, interesting name there. and they reduced their stakes in j & j and kraft foods. now to green light capital, david einhorn. we know he has some long bets,

specifically new in dell, stere ox, research in motion and yahoo!. soros' fund management, they completely ended their stakes in xer xerox, but they were long tech. in fact raising his stakes in google and yahoo!. finally, guys. appaloosa, they raised their stake in apple, by 377%. they ended their stakes in e*trade, google, applied materials and citigroup. >> interesting, blien to see how much are just chasing apple. i don't think that will get them outperformance. >> you know, you're exactly right. two things, david. every 13-f i've gone through, apple is in there or has been

added. there's your reason why apple is going up, but if you're a hedge fund, to your point, if you're riding the same wave as everybody, how do you justify the performance fees 1234 i know you're close to liberty media and john malone, i've seen liberty as new positions. i'm not sure what the interest is, but i can tell you, a number of folks that we don't have time to report on have been adding to or creating positions in liberty media. >> interesting to note. he's been the favorite of the hedge fund community, but i'll take a look at it myself. will apple's efforts be enough to quiet critics? should investor be worried that the love affair may come crashing down? stick around. (

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let's look at comcast shares. it's the parent of our network, but you see the stock having a very good day after reporting numbers that were better than anticipated. cash flow is strong, broadband very strong. it almost lost no vitt i don't subscribers when there had been an anticipation there would be a significant losses, as we've seen from many cable companies over the last year or so, comcast also raising the different by 44%, and instituting a 6.5 billion buyback, all of which is adding up to a significant gain. >> why do they not buy ge, because it's cheaply financed, it's better for the stockholders to do a buyback? >> they have the option to increase the stake over time, and they will do that. i don't remember the exact dates, but it is a staged buy-in

that will -- over seven years or something along those lines. >> they think there's more value -- >> now, but it does not run at a high leverage companies. comcast is very conservative in how much debt it wants on the balance sheets versus the cash flow. stocks to watch as well. over an hour into the trading day. jim cramer said later will be on "mad money," i think i picked that up. better than expected, as oil and gas rose. >> children's place was downgraded. that stock is down 1%. trip adviser initiated outperform and required research, if you look, that stock is not done particularly well. some would say not too distant spin-off from expedia.

it took years for nike to rush back to the top. is apple getting caught in the same situation. tim cook defended the allegations last night. >> our commitment is very, very simple. we believe that every worker has the right to a fair and safe work environment, free of discrimination, where they can earn a competitive wages, and they can voice their concerns freely. >> the troubles over at foxconn bring down apple bring down apple like they did for nike? >> it seems, dennis, the difference at least in my view is that with nike, you can buy another pair of sneakers very easily, but there really is no ipad out there or iphone. >> you don't want to be callous, but right now there is riots going on in china, and those are

people very eager to buy the iphone. the power of this brand, the power of these products seems to super cede any legitimate concerns about how workers are treated in the factories that apple contracts. so for that reason i tend to see it as an important image issue, but when it comes long term to the fate of the business, really not a problem for apple, where again people are rioting. >> maggie, you say it's the perfect opportunity for activists to expos this problem, do you think it will impact apple in any financial way? >> i don't think there will be a financial impact. as dennis was saying, people are really hot for these products. apple really has to worry more about keeping up with the tech nolgts. i mean, you have google android devices also nipping at their heels. people may be rioting in china now for apple products, but android products are selling pretty well as well. so i don't think this particular

issue would take down apple, but there is competition. >> and i do think apple has a bit of a different circumstance here. here it is one of the most valuable companies on earth. the cash pile is over $100 billion. it has i any in the eyes of the public some moral duty to treat its workers perhaps fairly, perhaps even better than fairly given how rich -- >> how do you know, dennis that that's not happening? are we creating night mares that -- you've got to seriously distrust cook at the head, as if he would make that sort of error that apple would be behind the curve on that. it seems an unfair assumption to make without some decent facts to back it up. >> well, i don't think apple is necessarily behind the curve, but when you look at the reports that have come out, "new york times" has done some fine reporting on this. when you look at some of the situations with regards to nike, which just paid a mill yen to

workers in indonesia for back pay, i don't think we can say it's a pristine report, nor can we say that apple is flagrantly disregarding its duty, but i think the company itself would acknowledge that there's much work to do. >> you know, maggie, the larger issue, worker conditions, people who are being underpaid to perform jon in china, to the extent this changes over time, that would seem results in higher prices being paid by people wo buy these products, and therefore might hurt margins at apple. would you agree? >> absolutely. one of the reasons that companies like apple are manufacturing products in these places is because the labor is cheap. you know, i think it's going to be difficult for them to make sure that people are paid what they should be paid, because these are people living in poor areas, poor conditions, tanned they just need money to survive.

the flip side is if you start paying those workers more, yeah, that does eat into margins, but i think sadly what happens -- and this isn't just apple, this is manufacturing everywhere -- if the costs get too high, the companies move to someplace where it's cheaper. >> it's really fascinating to see what's goings on inned chij ease labor market. we're seeing cost increases for positions like apple -- those prices are going up 15%, 20%, starting from a low base, what activists may or may not do, the market is doing, and it is driving wage costs up in china. >> but across the board, across the board, not necessarily at apple's expense. it's a global phenomenon. >> that's right. >> but very important thing to watch certainly in therms of job crazy. >> good conversation. thank you for your time. strayed ahead this morning, hold on to your seats, folks. jane wells will talk about laying hen's eggs and federal

regulation, in the same batch. but first let's go to rick santelli and see what he's working on in the next hour. >> good morning, simon hobbs. we're going to be talking about my generation of the most famous asterisks was roger maris' home runs, but some go entice politics and spending. we're going to show you what they are, top of the hour.

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great reaction this morning to news from kellogg's ceo john bryant that he's going to be y buyibu buying pringles, let's get analysis, david palmer works for ubs. you like this deal? >> we like the deal. it helps them get big anywhere snacking. it gives them a source of earnings power as the current base cereal business is having a bit of a struggle these days. as you know, the core category of cereal is having more competition. and this helps kellogg get big anywhere a category that's clearly expanding. both domestically and overseas.

>> what about the price? >> it seems to be a good price. it's certainly going to be accretive to earnings and with the synergies, it seems conservatively this could add one to two points of eps growth over the next few years. insuring that the company delivers on a high single-digit eps growth target. >> when we talked to john bryant on the show, he mentioned this would help the rest of the snack foods under kellogg get into new countries, new territories around the world. what are some of the, when you think about the deal proceeding, what are some of the snacks that could benefit from a new market and what markets are they not in currently that they will get in because of the pringles deal? >> you know, that's a great question. we're going to hear a lot more about that next week when we have meetings with them. that's some of the stuff they've been hitting at, that we in the investment community don't know a lot about in terms of their revenue synergies. their targets don't include the revenue synergies, the acceleration in cross-selling benefits. they're not included in the

numbers, so that sort of upside could send the stock higher. >> that is the synergy number we're talking about it a certain extent, is it not? >> no. it is not. the synergies they're talking about from purely cost side. >> i don't consider cost saved synergies. synergies are synergies. >> the softer target, which is how much more stuff are we going to sell because we now have this under our umbrella. >> and that's the key. of course it's always harder to anticipate, have you raised your numbers at all in terms of the out years here as a result? >> we took up our number, for instance next year by six cents. the supposition of course is that in addition to the financial part, which they're going to have some interest costs offsetting, supporting the reinvestment in the cereal business, which remains soft. if it firms up, there's additional upside beyond the price target. >> in terms of percentages, with the pringles acquisition, what's the praekdown between snacks and

kelloggs at kellogg? >> you have to 45% snack. it's amazingly half snacks. >> would you be looking to raise that $56 price target again when you talk to them in a month's time? it is, has upside risks, i assume? >> well it does seem like that. and particularly if that cereal business stabilizes, one thing that they have to to deal with is their frozen waffle business has been on fire. so there's some element of defense. it's giving them some earnings power to sort of sub zsidize th rest of the business and make them more competitive. >> david palmer from ubs. we've been playing romantic economic tweets all morning for you. here's another one to get you going. >> roses are red, violets are blue, my balance sheet is expanding, just thinking of you. >> i think it's creepy. but they come fra recently

trending hashtag on twitter called fedvalentine. >> justin wol dpmpb fers. do you have amorous desires for ben bernanke? >> i have two great loves in my life. the love of my wife and the other is economics. >> then what was the inspiration for starting this, which got some very creative tweets, i might add, despite my dislike, perhaps for the voice tweeting them on our air. >> well, i'll admit, i ripped it off. there was a wonderful hashtag, called healthpolicies valentine. and the health wonks were talking about moral hazard and adverse selection. so i thought those of us thinking about macroeconomics might be as least as funny. and the fed is really a great target for laughs. >> what's your next planned hashtag? it sounds like you can put anything sort of mildly geeky

and create a stir. would it be #euro debt valentine's? >> we've the political science valentines the development economists got jealous, they've got their development valentine's running as well. >> #merkel. >> merkel for sarkozy? >> why do you think central banks are an obvious target for this. would you have done it if in greenspan's day? >> chairman bernanke, to his great credit tries to be clear and straightforward and transparent. but the truth is that central banks the world over speak in a a sort of odd sort of double-speak. and if there's a way to make double-speak be either clear or romantic, i'm in favor of it. >> the language of love. >> double-speak. >> justin, thanks, we look forward to your future efforts.

thank you. >> okay. >> justin wolfers from the university of pennsylvania. still to come, ineinhorn jumping into r.i.m. [ male announcer ] aggressive new styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the new c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.

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a couple minutes before the top of the hour, simon, i imagine that all eyes are still on europe. now with the development that everything to be postponed until april. that's just bad news for the market here. >> let's not forget that we've got the conference call starting now of the euro finance ministers. you don't get the physical ability get comments from them on the way in. i notice "the wall street journal" live blog is suggesting that goldman's, goldman's is closing its long dollar position. so there is clear nervousness going into what exactly they're going to come out with. >> dealing with another day with apple making new eyes. $488 billion market value. the stock has had quite a move over the last week. >> yeah and to call it parabolic is actually appropriate. at this point, given the amount of market capitalization, it has added in 2012 alone. it is an amazing run that we've seen here for apple. guys it's been great working with you today. as always, david, it's good to see you down here in person.

simon, i'll see you at 11:30 for 9 european close. third hour of "squawk on the street" starts right now. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> the issue shouldn't be whether we do with this rate or that rate. the question should be, what form of taxes will give us the revenues we need and let us be competitive and create jobs and give us economic growth. that's what we need. and no one would argue that the current system does it. we need a new system. >> we really had a great quarter on xfinity products, which are high-speed internet. had a fabulous quarter, better than 2010 by over 10%. last year at this time, jp morgan was talking about an ipad glut. so many other companies were coming out with products. guess what, the ipad is looking a lot like the ipod. meaning game, set match from

year one. is it critical acquisition for the kellogg company. it nearly tripled the size of our international snack business. and it's an important addition to our u.s. snack business as well. opening bell set to look at the real-time exchange. a big jump in home builder confidence in february from 25 to 29 on the national association of home builders monthly sentiment index. you have to look at the company's own earnings and cash-generating power. and on that basis, you know, we feel comfortable with taking the target to 12, which clearly is below where the stock is today. good morning, let's gate check on the markets at the top of the hour. we've got the dow pointed to the down side, down by about 32 points, the s&p 500 and the nasdaq are clinging on to gains. helped in part by yet another record high in shares of apple. up now by more than $15 a share. home builders in the green as confidence in the market for new homes climbed to the highest

level in more than four years. gold climbing today, looking to end a three-session losing streak. the precious metal getting a boost from the greek debt saga, as well as rising oil prices. let's hilt a road map for this wednesday. the fda issuing a warning about a counterfeit cancer drug found in the united states. we talked to a former fda official about what the fake drug means for the industry as a whole. research in motion finding a buyer in david einhorn's capital. can the momentum continue? plus why some american farmers are worried about a government takeover. and then starbucks brewing up controversy over guns. we talk to the head of the organization protesting against the coffee giant's stance on the second amendment. all of that coming up in the next hour. but we've got to begin with a cnbc exclusive. former treasury secretary, hank paulson, speaking to our own andrew ross sorkin today, saying he's encouraged by recent economic news, but it will be a long slog to recovery in the u.n.

andrew ross sorkin is here with more from that interview. >> we asked the treasury secretary to think about the european situation and whether it was right to compare it to what happened in september of 2008. take a listen. >> when you look at lehman brothers, remember, i believe lehman was a symptom as much as anything. because we had, we had aig, merrill, lehman brothers, all going down the same week. we had this problem throughout europe. i don't think that is the right analogy. but i think the one thing that we should take away from lehman brothers, is you don't want a big systemic institution to fail in a messy way. and you clearly don't want that to happen with a member state. >> given all the controversy around the volcker rule these days, we asked him whether he supports it and his answer is pretty interesting. take a listen to this. >> i advocated very strong tough

regulation on the big banks. and but i didn't advocate the voeckler rule as a way to go. the reason i didn't, from my experience, when i looked at the failures and the problems we were dealing with it, it didn't come from propriety trading. >> paulson was actually in town speaking to the next or soon-to-be president of china, and one of the questions that we posited with him was, whether china is a cheater. take a listen. >> i fought as hard as anyone to create a level playing field in china. and so there's a lot of work that needs to be done. but, i tend to take a more positive approach and take an affirmative agenda. and i look at china as largest export market. our fastest-growing export market. and so the things i'm

emphasizing are things that going to grow the pie. >> and finally, i asked him about the continuing and lingering questions over the bailouts and the negative sentiment around them. here was his answer. >> when i left my job, there was a poll. and the poll showed that 92% of the american people were against the t.a.r.p. and that the same poll, 60% were against torture. and so that's just, that tells you something. and but when you think deeper about it, i understood why. the american people don't like bailouts. >> you know, the treasury secretary had a lot of different interesting views. we actually have a lot of them also online. but that was a pretty interesting conversation. he doesn't do a lot of tv, so it was good to talk to him this morning. >> a tremendous interview. andrew ross sorkin thanks so much. now let's check in with ka tall markets gary ka minsky. today of all days, there's a stark contrast of the good ipo

and the bad ipo. the good ipo, coors, which continues to hit new highs and then zinga, which is falling off the cliff after guidance. >> let's talk about the anatomy of what makes a good ipo. if you look at coors and you did some good reporting on this yesterday. if you look at them, up 116% since the ipo price. great quarter took up guidance. you look at zynga. it was priced at $10 a share. immediately broke the penalty bid. is trading 24% above the ipo price, the $10 ipo price. if you look back to the actual transactions, look at terms of the deals. essentially michael kors, pricing at $20 a share, raising approximately $944 million. lead managed by goldman sachs. zynga, raised about $1 billion, led by morgan stanley. both of these on paper trading above the ipo price. but what makes a very good ipo? and that's couple of elements that you have to look at. in both of these are great

examples of what it was. take a look here. you've got to recognize that the companies coming out, the bankers know what -- they will not admit it, but the bankers know what the first quarter is going to look like. you've got to underpromise and overdeliver. secondly you've got to recognize that flippers will participate. every leader knows there will be a certain number of shares that will become public that will come right away back into the marketplace. in the case of kors, that was fine. third point and this is exactly what you're seeing today. the first public quarter, have to have the transition of stock from flippers, from participants at the ipo, into stronger hands. you've seen the anatomy today of a good ipo and a bad ipo. >> gary kaminsky. >> lelsa, stay right there. sorkin, give me that. melissa, who is that? up to the line, three-pointer, who is that? >> i would guess jeremy lin.

except that that form was nowhere right. >> hold on one second. we'll do it again, come on, i think he's going to drive -- boom. now i have a question for you. when you were at harvard, because lin is obviously, were you hanging out with the basketball players when you were at harvard? >> no, my head was in the books. >> i would have, i'm going to beg to differ with that. we'll talk about that later. >> we will, gary, thanks a lot. let's get to the cme group. rick santelli is here with the santelli exchange. >> in 1961, roger maris broke babe ruth's home run record, hitting .61. but his season was eight games longer. now let's move 20 current times, there's a lot of talk about the payroll tax cut that's the republicans signed off on without any way to really pay for it. and there should be an asterisk here. because as we've learned from some great economists like art laffer. the thing about taxes and why many fiscal conservatives like to lower them, like the

republicans most of the time is because they modify long-term behavior in a positive way, that generate more growth. but tell me how eight months, ten months, a year on the payroll tax extension is going to modify behavior. would you viewers or listeners, would you refi your house if the refi rate was only for a very short period of time? or yesterday was valentine's day? how would you feel, women, wives, girlfriends out there, if your significant other said, listen, for the next year i'm going to actually shave, comb my hair and have some good personal hygiene and stop tweeting other females, but only forea year. it doesn't make sense, there's a tax asterisk there. the great interview of andrew ross sorkin, what did the ex-treasury secretary say? it's going to be a long slog. the problem with long slogs are that ultimately politicians like to make little promises along the way or do little programs

along the way that really aren't going to change the length of the slog. but they change the amount of deficits. think about spending. how many times have you heard, we have to keep spending. but yet, everything that controls spending is always in the next election cycle. which is the biggest asterisk of all in politics. the goal of politics should be to serve you. but, it seems it's just to get re-elected. otherwise why wouldn't politicians deal with this? because they probably wouldn't get re-elected. back to you. >> rick santelli, thanks so much. swiss drug maker roche is putting out a serious warning this morning to patients, doctors and hospitals, telling everyone to be aware of fake avastin. doctor gottlieb is now with the american enterprise institute. dr. gottlieb, great to have you with us. most people are wondering, how can this happen? what are the supply chains like in terms of u.s. drugs so fake drugs can make it into the system and get distributed to

doctors? >> the supply chain is very closed. someone deliberately went into irp, purchased product that they thought was destined for the european market to sell it here at a higher price. trying to capture the arbitrage. this going to invariably involve criminal activity, someone was very deliberate here. >> what kind of person can go to another market and resell it here in the united states? who is buying that? are they selling it to doctors or hospitals? >> genentech sells to distributors and those sell it to physicians offices. someone in the doctor's office had to know as well, because the packaging was not u.s. packaging. it's easy to tell what avastin is destined for the u.s. market. so someone was very deliberate here and probably more than one person. >> the fda is still investigating. i would imagine that this is a tremendous problem for roche, from the standpoint of a doctor, do you then question the

distribution and validity of all of roche's drugs? >> it should be easy for doctors to look at the product in their offices to make sure it was sourced appropriately. roche is involved in three dozen vials, roche ships around 100,000 vials of this product a week if you look at their report this was a small amount. the fact that they caught this shows how closed the system is. >> despite how closed the system is, there have been cases in the past of fake other drugs, generic tamiflu in 2010 and a belgian man pleaded guilty to selling potentially phony viagra and lipitor. and there's fake versions of the weight loss drug alli. consumers must be feeling a little bit concerned, should they be? >> well there's no question this is a growing problem. more people trying to penetrate the market with counterfeit drugs. i think the system for the pill drugs is more vulnerable than the system for the injected drugs. because the injected drugs are distributed more tightly controlled system. certainly when you go on the

internet, you're taking a real risk. a lot of those drugs are counterfeit and this is a growing problem. >> in your view, is the fda being vigilant when it comes to internet sales? you can go onto the internet and almost, it's seems like you can buy any drug out there on the internet. you don't know where it's coming from and you don't know if it's real. >> i think the fda has been very vigilant. i think they're cracking down hard to protect consumers. >> do we see the instances of fake and the desire to make more money or bring costs down in an environment where the economy is not doing so well? hospitals are faced with rises costs? >> this is just complete counterfeiting. these are people trying to make money by selling fake product. >> all right, dr. gottlieb, thanks a lot for joining us. scott gottlieb. coming up next, research in motion getting a much-needed boost from david einhorn, will it be a lasting effect? ♪

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♪ ♪ david einhorn of green light capital, a buyer of r.i.m., the software moving higher on the disclosure of the filing last night. can the momentum continue? senior communications technologist tavis mccourt is with us for more. i'm wondering now with david einhorn, having a stake in the

company theoretically, we of course don't know if he's sold since then or what but assuming he still has a stake in the company, does that make your more optimistic that perhaps change will in fact come to the company? >> i think it makes me more optimistic that perhaps after this year, if their current strategy doesn't work out, that they may be open to other things in the future. you know, my sense is that their plan for this year is not going to change. >> do you like that plan for this year? do you think that it will actually change the company? turn it around? >> yes, so in terms of you know the plan to continue to invest into blackberry 10, their next platform and to really go back hard at the u.s. market when the launch is, i think it's a worthwhile bet. i think the chances of success of that in the u.s. is relatively low. but i think a lot of the future profitability of r.i.m. is likely to come internationally. i think there's still kind of a wide-open race internationally. where if they can put out better product and continue to build on

the success they've had in some of these markets, they can be, you know, a good niche provider of smartphones, longer-term. >> in terms of market share, f tavis, i'm curious what you think about the gardner research. apple as it sits at yet another record high in today's session, is also making gains. is this all at the expense of r.i.m.? does it make it that much tougher for r.i.m. to get ahold of new customers? >> yeah. i mean i think what it says is there's a window of opportunity that is closing. and my personal opinion is i think the window of opportunity in the u.s. is probably closed. i think the u.s. for nokia and r.i.m. is going to be very difficult at this point. i think it's probably an apple and samsung world for a long time. internationally, there's a window of opportunity and i think that window is a little bit more wide open. largely because apple, with the price points where they are, doesn't compete extraordinarily well in a lot of emerging markets. and samsung, even though they

do, their low-end product, their high-end product is relatively expensive as well. >> in terms of the window of opportunity, overlay that with the one-year plan here. i mean if we wait a year, if r.i.m. and r.i.m. shareholders wait that one year for einhorn to put this in place, will the window have effectively been closed? >> it could. i think part of why a lot of value investors find this interesting is this is kind of a graham and dodd special. it's trading close to liquidation value, if not below it. these guys have about $8 of working capital per share. they purchased about $2 billion or $3 billion of patents over the last few years. if not trading that far over a complete liquidation value. and for all the negative trends, there's still likely to make money for at least the next four to six quarters. regardless of the strategic success in the turn-around. so i think, i don't think greenlight's bet is a massive bet.

to put it in perspective, their massive holdings are about ten times with what their r.i.m. holdings are. it's intriguing from valuation basis and it makes me comfortable that the management team is making the bet they're making this year. but perhaps they're a little more open to various other strategic alternatives. >> tavis, thanks for your analysis of the situation. tavis mccourt of morgan keegan who has a $17 price target on r.i.m. market rating suitability speculative. we're counting you down to the close in europe. we'll bring you details on the effect of the markets here in the united states. but first, rick santelli is keeping track of the trades at the cme. he'll tell you which ones matter most for your morningny, after this. in absolute perfect iphysical conditioner, and i had a heart attack right out of the clear blue...

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rick santelli is at the cme group, talking about liquidity today. rick? >> absolutely. i'd like to wear our guest, gina sanchez with rabbani global economics. welcome, gina. you know i find it so

fascinating that one of the few people that called the crisis ends up getting nicknamed dr. doom. ends up getting ridiculed to some extent. shoot the messenger. you, the last time you were on air said you don't cure problems with insolvency with liquidity or maybe i'll paraphrase, it's hard to put out a grease fire with water or liquidity. you have flipped, your organization has flipped more friendly to stocks, very little really has changed in the world. we're talking about bridge loans for greece today, kicking the can. can you give me an idea why? and what's the duration of this bullishness? near-term or longer-term? >> well, it's not really, i wouldn't call it bullishness. it's a tactical trade. and the tactical bet is that we heard some significant change in ecb rhetoric, a real belief that they are committed, really committed to making sure that the bailout happens.

they're committed through liquidity, through the long-term refinancing operation and through other means as we heard today, we've heard a few different options today about how the ecb plans to support the bailout. so you know, we're basically saying, we think the bailout is going to go through and we think the markets will be true to that and we're taking a very small overweight. but our overall number for the s&p is still 1300. so we're still at the bottom of the pack when it comes to views on the s&p. and that's just that things really haven't changed. just like you said. you're throwing a lot of liquidity at this. and liquidity does help markets. if you look at the last two major liquidity rollouts out of the united states, they were massively beneficial to markets. and we're basically thinking the same is going to happen. >> well, now that we're all looking at the puddles in the kitchen with all this liquidity, my next question is, what about treasuries or fixed income in general? how do you fit that into your asset allocation at these lofty prices and low yields? do you stay away from major

sovereigns like boons, bobbles, and treasuries and only do corporates? what's your allocation in that regard? >> that's our biggest allocation. we don't see that treasuries have a whole lot to go. and so we're definitely allocated towards credit. we having an underweight in high-yield which we've taken off. that boosts the view that we think credit has some legs. we're not quite overweight high-yield yet. we don't think that that risk has gone away. there's some fat-tail risk there. generally speaking, we're talking about keeping to the corporate, keeping to the high quality. >> well march 20th is the deadline with regard to default in greece. i want to have you back on the 21st and we'll do a post mortem, thanks, gina. >> thank you, rick santelli. just a few minutes until the markets close over in europe. bringing you all the action live right after this. spark card from capital one. oyee of the mo.

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seconds away until the european close. let's bring in simon hobbs. what are you watching? >> what's remarkable around europe is the way in which we were set up for a great day, from asia, from emerging markets, with the aftermath of the bank of japan, to have a great day in europe. but ultimately the party has been spoiled, partly by the opening we've had here, more importantly the news coming out

from brussels. just wrapping up wednesday's session. the european markets are closing now. >> there is still green on the screens as you can see for much of europe. something like spain dipping into negative territory. as i said earlier, we were set up better than that at the beginning of the session. let's look at the three major indices you'll see how london, frankfurt and paris were doing great guns and at that stage it was quite a broad-based rally. what happened was, we just took the edge off that. and weren't very dramatic moves, some of the banks notably that had done well, cut their gains. the governing of the bank of china was suggesting overnight that perhaps china could help directly in the crisis. you had the bank of japan quantitative easing and emerging markets rallied strongly. asia rallied strongly overnight. but we've sold into that and the major reason for that is this conference call that started 30 minutes ago. from the members of the euro group where they're clearly suggesting they might cut or axe

the greek bailout for want of a better expression. melissa, let's look at the euro while we're there. that's the glass han hf full bit. as we heard from gina sanchez a few moments ago. paying the bills for greece on march 20, albeit with a bridging loan. >> let's bring in bob pasani here. it sounds like now the market is in for death by 1,000 paper cuts, but sort of this slow -- yes, slow cuts. >> yet look, we still have no idea what ultimately is happening. we just don't know. and i think everyone has got to acknowledge that look at the markets, put up the sectors, we're on either side of positive or negative. some of the bigger sectors we follow every day, like the tech sector, continuing to lead. >> is that -- but apple is masking the performance of technology. >> that is correct. but before we say x apple the rest of the world here. the rest of the market is holding up pretty well. i'm rather surprised, actually.

industrials is the only major one that have been to the down side. remember the market leadership had been materials, financials and technology. and they're holding up today even though they're showing signs of being topee, they're holding up here. let me make some comments about the rest of the stock market. we found some remarkably optimistic comments on housing in the last few days. did you see the nhaid home survey that came out? it's a five-year high, that's remarkable. >> then i think to owings-corning and massco. >> owens corning says they've had a lousy report but they anticipate improved housing starts in 2012. they're optimistic. massco had a crummy report yesterday and they expressed cautious optimism. there's an awful lot of people betting on housing recovery. if you look at the housing market index, the itb is the one to use, that's the best one with all the home builders in it. it's at a new high today. what's happening is everyone is betting that the spring

home-buying season is going to be terrific. john burns, a respected analyst thinks it's going to be up 20%. we've got new highs in ryeland. we've got new highs in pulte. new highs in lennar. i'm the son of a home builders, i grew up in the spring home-buying season. i carried the wood for my father's projects, i was a laborer, i was a carpenter's assist bt throughout the 1970s. >> melissa, i want to jump in. bob, you mentioned about the s&p tech sector. i know you were probably one of the first, if not the first to coin this apple being its own asset class. take a look at the nasdaq today. apple is actually representing 90%, 9-0% of the nasdaq's gain today. talk about being its own asset class? that's all you need to say. >> i think we have to talk about tech x apple routinely now and. >> or the markets x apple. should we be talking about the

s&p 500 x apple? >> melissa, correct me if i'm wrong, but did you not first, and i think you really did, make that point a long time ago, that apple was really its own asset class, as far as portfolio managers looking at their portfolio, it was apple and everything else? >> when you got a $500 billion company, what are you going to do? one other comment about a hot sector right now. you want to know what's on fire? the hmos, medicare companies, we had an incredible report from wellcare today. not only are people using doctors less, we knew that trend. but what they call the dual payers, the dual people out using medicare and medicaid, there's a lot of anticipation that business is going to go upth and companies that have medicare exposure, hmos, all of these companies have been doing very well. >> bob, thank you very much. gary, back to you and maybe continuing on this notion of the markets x apple. x am, do you like the earnings growth that the s&p 500 is showing?

do you like the fundamental look of the s&p 500 x apple? >> well, listen, i think there's a lot of things we could say about the s&p in terms of the earnings performance of q1, we could talk about the technicals. i think you can come away with a mixed message, depending how you want to spin it. but i do want to talk about something. i know you've read this book, you give it great recommendation and i want to talk about one thing, i want to talk about comcast. obviously the parent company of nbc universal and i'm actually a comcast customer in utah. i want to talk something that the book talks about, which is free cash flow and how you look at those companies, those companies that can really separate themselves. if you generate free cash flow, basically five things that you can do with it. the first being organic growth. you look at comcast today, organic growth. dividends and distributions, fantastic, significant increase in the dividend. obviously you track the incoming growth investors. but show the disciplined capital allocation. buy-back shares. what i loved about the comcast news today, not only was it a

significant buy-back, but it was well articulated, how the buy-back was going it take place, as opposed to throwing it out there. m&a, i always say one out of ten deals over the long-term add value. in terms of the comcast/nbc universal deal, given the price paid, the timing, one of those seems to be shaping up with the free cash flow generated there. and obviously, what don't you want to do? you want to do nothing, you don't want to sit there with the cash as you know, a good point in terms of getting back to apple. comcast, have to say today in terms of capital allocation, they're in the sweet spot right now. they've done everything that an investor wants them to do. >> right. and yet, interestingly you brought up apple once again, because it's doing nothing with its $100 billion in cash. >> correct. >> and that is the stock that everybody wants to own. >> exactly, thaus bas the obvious reasons of relative performance. just think, just think, because apple you've got the organic growth. just think about what could be if in fact they did something, right? >> gary ka minsky, thanks for

that. rick santelli in chick, next. >> you know i know that the news is fluid, you never know what's on and what's off with regard to the bailout in greece. but obviously these special bridge loan notes that are making their way around the trading floors, do paint a picture, whether it's true or not, that it's very difficult for literally hundreds of euro kratze crats and techno carats to try to get the deal worked out. look at interday chart of the german stock interday, the dax. it drifted south. look at a two-week chart of ten-year boon yields, now close to 186, close to two-week lows. this isn't it's going to ufrl

continue to dominate the marketplace. should the farmers of america be getting ready for what some are calling a government takeover? our own jane wells has a preview of that story. jane? >> melissa, what came first, the chickle fight or the egg? we've got a breakfast burrito battle between the ham and egg industries. but first, take a look at what's the euro pops with euro trash this morning. kratzert 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.

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it is ham versus eggs. egg producers are fighting for better conditions for hens. hog ranchers are worried about government regulations. will these two ever be able to come to an greenlt. jane wells is live at the world ag show in california. >> we're in the heart of the

california central valley where bacon and eggs have broken up. the united egg producers has teamed with long-time rival, the american humane society, to give chickens more room and that's not going over easy with other livestock producers. >> jill benson helps run a massive egg operation in california. her hands are in a new $7 million so-called enriched colony barn that basically doubles the normal space for birds, that's because california has passed a law forcing more room for chickens by 2015. making it more expensive to produce eggs here. now there's a bill in congress to make it federal law for all egg producers. >> i think that the reality today is that consumers are demanding certain standards in the way their food is produced. >> there's a reason we want this federal legislation is to create an even playing field across the nation. and this federal legislation

only changes the egg inspection act. it doesn't affect any other anim animal ag in history. >> pork producers and cattle ranchers are crying foul, saying once any federal law mandates these rules for one species, how long before it's forced on all of them? >> it's not a food safety issue. it's not a human health issue. these are issues about animal housing. we've had over 100 million sows in the country today, if you take that times any kind of a small number, you realize that we're going to be into the billions of dollars. if it was in the hog situation to get this conversion done. >> now, if this congressional bill passes, it could cost the poultry industry $4 billion as it's eased in over the next 15 to 18 years. does it make the chickens happier? more productive? jill benson says in her new barn there's a lower mortality rate and production is just as good, if not better.

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there's a boycott brewing at starbucks, the coffee shop is the target of a nationwide protest by the national gun victims action council, stemming from a decision by starbucks to let their patrons carry guns into their stores where it is legal. according to the group, a boycott could be cause of concern to starbucks shareholders, especially the top 20 institutional fund-holders. here to explain more is elliott fineman, ceo of nga. the boycott of starbucks started yesterday. what's been the turn-out so far? >> well to clear up something that's been misconstrued, melissa, our boycott is going to go on until starbucks rejects the nra's lethal pro gun agenda by banning guns from their stores and by becoming an advocate for sane gun laws. i don't know why it was

misunderstood that ours was a one-day boycott, but it's an ongoing boycott. the second thing is that you don't have demonstrations to show you're not going to be buying. you just simply don't buy. so we had no demonstrations planned for yesterday. nor would we. our program is to just spend our money in different places. >> how do you know that it's, how do you know that it's working? you're going to keep doing this until starbucks says you know what, we don't want people to carry guns into our stores. >> we have one way of tracking it is that all the people who are on our side and support what we're doing. report to us how much they're not going to be spending at starbucks. either in their stores or upon their products. so we have that analytic to look at. secondly, we've done monte carlo simulation studies of what the most likely impact will be of

our boycott. and i can tell you that 90% of the time of the studies indicate that it will have a very significant effect on the starbucks' stock. >> we're going to read the full statement from starbucks. but just to guide the interview, elliott, starbucks says we abide by the laws that permit open carry in 43 u.s. states. why would you expect starbucks to go above and beyond what is law in the land and implement a rule that is not consistent with the law? is starbucks the only one out there? why are you picking on starbucks? >> well two very good questions, melissa. the first one is that starbucks' statement is most disingenuous. it's intellectually dishonest. because they know that they have the law which would allow them to ban guns. they're making a choice between two competing laws. one that says they can't allow guns and one that says that they can ban guns.

starbucks is pretty much unique in that companies like disney, pete's coffee shop, california pizza kitchen, to name a few, have banned guns and it's a pretty simple thing to do. you put up a sign and make clear that if people come in with guns you're going to call the police. but starbucks has chosen to allow guns. and that's something we find to be unacceptable. >> elliott, do you have any plans to bring this protest to the level of the shareholder in that institutions obviously mutual funds out there. they hold starbucks, are you willing to go to them in addition to urging a boycott of starbucks? >> i would think, melissa, that the institutions would be savvy enough to understand that there's going to be a double-digit hit to starbucks stock, 90% of the time, if this boycott continues.

the top 20 institutions own 357 million shares of starbucks stock. and if they're not forewarned, what more can we do? no, we're not going to go to them. they can make their own decisions. we're going to carry on this boycott until starbucks rejects solidly, the nra's lethal program agenda. >> elliott, thank you for your time. elliott fineman, the ceo of the national gun victim's action council. coming up, we'll play some of the best and most romantic fed valentine's from the whole twitter-verse. the next block is all about the lovers out there. 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.

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all morning long in honor of our valentine's hangover, we're playing some of twitter's love letters to the economy. here's your final installment of fed valentine's. >> your equation is deriving me crazy. being with you, hikes my pulse by several basis points. i'll be faithful to you at least until late 2014.

the nontraditional stimulus was way better than i thought it would be. roses are red, these tweets are great, would you like to learn about our dual mandate? >> they're very clever, but rick santelli, i think they're a little bit creepy. >> some of them are. but i have one, roses are red, violets are blue, freddie and fannie have no money, so they're going to take it from you. >> ooh, rick santelli, that is a good one. who would have thought you were a poet at heart? >> yes, i am. i like writing poetry, special i had when it starts with roses are red. but i'll tell you, to me i think the most interesting aspect of today without a doubt is the talk about these bridge loans. i really think that it's so unfortunate, but in matter what country you live in, melissa lee, unless there's a crisis, nothing gets done. think there's going to have to be a little more horsepower

before we're all said and done. >> i don't know you've got any fed valentine's poetry, limer k limericks to share? >> i leave that stuff for off-air, but those are good. i mentioned the michael kors's ipo. i want to make some correction for something we had up on the wall. in the case of michael kors, it was morgan stanley who co-managed deal with goldman. morgan stanley in fact led the pricing on both of those transactions. obviously the point being that michael kors, very strong hands, as performed exceptionally well, from the pricing as well as after the first quarter report came out. in terms of the equity markets, we're at this point where you feel it kind of feels as if the next move is either going to be 300, 400 in the dow down, or 300 or 400 up. the grind that we've had since january 1st, it kind of feels to a lot of people that it's going to move in one direction very soon.

either one way. >> gary, can you translate those gains to the upside and the loses to the down side to the s&p 500? a lot of technicians i talked to said the s&p, we can't go anywhere here. >> if you actually look back to february 18th, 2011, i was running some charts, if you look at what was the last time you tried to pierce resistance, you didn't, you had a 100-point down slide, we're going to do some work on the technicals on what may the blowoff on the down side. >> if you were holding on to shares of apple at this point, yes, there was pressure to hold on to the shares, in terms of portfolio management, the position is getting bigger and bigger by the day because the stock is going higher. is it time perhaps to think about trimming -- >> i love the question and the answer is absolutely no. >> no? >> because you know that i like to keep my winners.

sell my losers. and if i had been forts nat enough to hold apple, i would look at it in the portfolio as a separate piece of the portfolio. but i would be crazy knowing what i know, to sell here, unless you've got some legal responsibility to trim. and certain accounts, you have to trim. because you've got these restrictions, but if there's no restrictions, let it ride. >> you would actually add to a position -- with the proceeds from a loser? >> i would not add to the position because you've got to be mindful in terms of portfolio construction. your question is would i be trimming back simply based on the fact that it was becoming a bigger percentage. and the answer is no, long-time viewers of cnbc know that some of the greatest wealth-creators we had was sun core energy because we let it ride year after year. >> when you talk about apple, you've got to talk about the loser in the space, which does appear to be research in motion on a market share basis today it's getting a pop on the

disclosure that david einhorn has initiated a new position in research in motion. clearly einhorn could have been in and out of this thing by now. >> listen -- >> is this a good thing? >> i would never buy a stock based on the fact that one hedge fund filed a 13-f and is in there. there's a lot of people that are in r.i.m., short r.i.m. einhorn is a great inventostor,t he's made plenty of mistakes. >> that's it for us on "squawk on the street," i'll see you at 5:00 for "fast money," we've got t. boone pickens. don't go anywhere, the "fast money" halftime report begins right now. four hours to go until the close. this is where we stand, we're at a seven-month high on the s&p and gaining, 1354. was the level we breached few moments ago. apple continues its upward