products but that's the way you do that. you don't stick in the middle because you're in the muddled middle. >> i think i understand but we'll have to have you back for more. >> thank you so much. that does it for us today. right now it's time for "squawk on the street." good morning and welcome to "squawk on the street." i'm melissa lee along with carl quintanilla. we will breakdown the numbers this hour. earlier gains after january durable good orders fell 4% that. was the biggest drop in three years. still, we're looking to open

higher across the board. europe has a selective default downgrade on greece here. we're down by a fraction of a percent. >> meantime, road map for this morning, what is up with dow 13,000? a researcher reminds us how bad the dow performs whenever it crosses a thousand point increment. >> we expect an upbeat outlook. did you know. >> a cruise can liner has lost power in the indian ocean. priceline not supporting many black eyes. the stock is up 6% this morning as domestic bookings rose to the highest level since 2010. >> do you know anyone who really uses google plus?

those users are spending literally a few minutes on it a month. in the meantime, the dow can't seem to end the day above 13,000. does this mean that the 2012 rally is nearing an end? i want to get cramer's take on that. 39 times the dow has crossed a thousand point increment. in the following two weeks, down half the time. average loss over two weeks of .4% s that a natural hangover? >> i think there are a lot of people -- i know this is going to sound strange to people. but a lot of institutions run their money like this. you know what, we're at that milestone. we're going to take a profit. it used to be people who put in orders at 13,000. i want to lock in 20, 30% of my portfolio. i know it sounds silly. it's child like. but it does happen. >> and we've seen it time and time again when it comes to individual stocks and indices

and you see people finally buying well at the bottom or they bought at that level in the past and they finally made whole and want out. >> you've got a lot of companies that aren't -- they have already reported looking for macro news. for instance, you can say, durable goods is going to control caterpillar. you breakdown caterpillar goods, not so bad. and then oil controls the bigger stocks in the index. you need to have many things go right to really take out 13,000 and we have mixed pictures. that doesn't allow us to power through. >> and i'm imagining the same thing for the s&p 500 which, of course, is the index that moves investors on wall street pay attention to. >> look, the s&p is up about 20%. you take a look. nasdaq is up since the october 4th bottom, 28%. other than a little dip in november, the so-called -- it's

been the most costly few words in the lexicon of traders. >> that's true. and uncertain when we will get another dip, quote, unquote, like that from a central bank in the midterm. markets might have a bit of a hangover. >> could be. it depends on how large it is or not large. it won't be small but maybe not as large as some people anticipate. will it be 500 billion euros. last time, the first time, 523 separate banks. let's not forget. and we did see an impact. interesting, we just got data from the central banks in italy and spain that did show that banks in those countries were significant buyers of the sovereign paper. more so than they have in the past. they increased, wrapped it up. carl, to your point, we'll wait and see. you know, it is easing so to speak in a way. it's been complimented for this

action, even though it may have been something in the works under trichet. but if it's way high, people get worried. >> we have this quiet week. why do we hear endlessly and then we get this data -- >> we didn't know. >> by the way, i bet that amount of money, it did not go to buying sovereign bonds. >> right. >> but this did. incrementally it did. you need some buyer taking things down. we saw the impact. we saw italy come from 7.15 or wherever we were at the end of the day. >> pretty incredible. a lot of people here remember that it was really low for u.s. rates. >> given the size of their budget deficits, they still need to borrow at an average -- >> and we need it for the longer haul. >> i think there's a consensus in the story.

we're still not seeing banks trusting banks. >> we're not. and it's larger than people anticipated. the economy is not -- so there are still those key questions. it's hard to imagine we're not going to revisit to some extent the problems that we dealt with last year at least in terms of the psychology of the market. it's still the bigger issue of solvency. >> and tieing back to the markets, if it comes back around expected, that is market expectation. that doesn't necessarily provide a break above 13,000. >> how about this pattern where europe closes and suddenly we focus on the u.s. i don't know what happens. otherwise we were so and the volume was light and easier to push it around.

all right. meantime, focused on the banks and waiting to hear what jamie dimon as it holds its investor meetings. it's been unusually vocal in the past couple of weeks between interviews, the various news outlets with maria bartiromo just a few weeks ago. what they have to say about housing and dividend, it may not differ. >> quick headlines right now but nothing that looks like the things we've seen in the past. cost savings to offset investment. this is the cfo. my friend, exposure declined to 15 billion. again, much of this is what we heard at the last conference call when they reported numbers. there was organic loan growth. that was ceased on the market as a positive. perhaps you'll get more color as you talk about the economy. >> when he look at jpmorgan stock, it's really been a laggard. it's not that great.

one of the things that shocked me is that jpmorgan, without a doubt, geez, what a great butting shoulders when you look at procter & gamble. but this stock has failed to ignite this market. and one of the reasons i think is because all we ever hear when we breakdown what is going on, net interest margins are horrible. you really do have a tremendous headwind from the federal reserve trying to make it so you and i can get loans. 3.5% mortgage? not good news. >> as barclays points out today, the stock has beaten the index for the past six years. >> wow. >> i mean, look at this thing. i mean, this thing is really the definition of the grand canyon. >> and some of the competitors have not had to move down as some of them did. >> wells fargo, what stocks he's

buying for his personal camp, jpmorgan, if he flips that, maybe we can see the stock forget. >> meantime, the cruise liner caught fire at a generator room in the indian ocean and this is just six weeks after the "costa concordia" crashed off the coast of italy. there was already speculation about pricing in. they are deliver food and flashlights to the passenger of this ship via helicopter until they can tow it into port. >> have you ever been on a cruise? >> whatever this cruise line is, it's the same family. that's the issue here. >> he's got a lot of room there, $10,000, rent it for a day. >> they are super max -- >> a lot of room.

>> it's so cheap they are rivaling circle lines. but i figure you can mask anything when you put those things in your car. >> a very nice family outing. >> carnival cruise, this is a level that a lot of people felt like the $30 level, this kind of thing is making it feel like it wasn't one off. this is a tremendous franchise but i thought bookings were beginning to snap back. this is when people are putting things out of their mind. i'm starting to think, geez, is there really a risk here when you land in mexico and you abandon. i mean, maybe it's not -- >> i think there's more options if something goes wrong. you can walk, for instance. >> you can walk away. >> they are still floating, we learned.

>> yes. last friday they said that earnings did not pick up and it was beginning to look like cruise lines were going to have to cut prices. not just giving cabin credits but actually cutting prices and this bill is during a time when people are booking cruises for their summer vacation. >> these guys burn a huge amount of oil and push a lot of traffic to europe and then we've got this problem in italy. this group is very challenged right here. but it's interesting to note that priceline is not seeing any sensation in touring. >> in fact, priceline is opening at highs today after posting its earnings yesterday. this is the highest in more than a decade, well above $600 a share. this is internet bubble territory. the online travel website going past estimates with 56% jump up in fourth quarter earnings. number of brokerages raising

price targets, including jpmorgan up to 730. and that is the prior highest target up to 720 from credit suisse. >> they even mention the fact that everybody in the industry is falling by the wayside. this is a big change in the model. when you retire shatner, you retire the model. one of the things that i like about priceline, it's a cheap way to book. that model, which is a classic travel model is working. the other guys don't have it. >> the one out liar, caveat, 55% of bookings is european hotels and cited weakness in southern europe. they are seeing that creep up although not an issue for this

quarter or oh the current quarter. >> how about 100 and some odd countries. germans -- >> do you mind if we just play the merkel video? last week the german chancellor meeting, a meeting of her christian democratic party when a young waiter -- do we have it? a young waiter spilled glasses of beer down her back. >> wow. >> pilzner? >> the guy literally had a tray of beer behind her and as he's leaning forward, the beer tips off the tray. here she is. she sits down. there's the waiter behind her. >> holy cow. >> that's not good. >> she doesn't have enough to deal with right now. sometimes it's not as jarring as

gatorade. >> that's true. >> everyone here to talk about their home price report. let's take a look at futures. interesting day shaping up as we once again flirt with 13,000. back in a minute. [ male announcer ] you are a business pro. lord of the carry-on. sovereign of the security line. you never take an upgrade for granted. and you rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i deserve this. [ male announcer ] you do, business pro. you do. go national. go like a pro.

let's get back to some of the data. home prices ended at new index

lows. the composite fell by 3.8% during the fourth quarter. we have carl case, robert shiller and david blitzer. gentlemen, good morning to you. >> good morning. >> the headline appears to be how we ended the end of the year. >> yes. it's down through the composite. all new post-crisis lows. something of a disappointment and continuation of the trend for the last couple of months. >> mr. shiler, we may not have anticipated that even at the beginning of last month, the idea that we would end on the lows, hopefully not, probably not, though we did. >> the funny thing is, we've been on a downtrend since 2006.

in 2009 it looked like it was going to get better. it's different from the stock market can. we are still on a downward momentum path. >> we're beginning to see sales come back but given that this is so much distress, is that true right now sth. >> we lag because we don't publish these numbers until we have closings. so we wait for closings and then publish a three-month moving average. so we're talking about the inventory numbers. the properties are way down to record low levels. households are starting to form again. the quantity side is starting to pick up. we should pick that up next time in the following month but it's not surprising to me that we're still on the downside. it's a huge shade doe inventory out there. there's a lot of things going on with fannie and freddie. >> there has been an

expectation, perhaps, that we would have stabilized by now. stabilization is not yet here. >> there hasn't been any stabilization and as bob mentioned the momentum is still going very much in the wrong direction. i think if you look at a broad range of indicators, you'll see volume increasing, pending home sales are up. prices are the last thing to turn. you've got to get people into the market, booking, get a few buying. and then maybe you'll get prices that turn. when? i wish i knew as well. >> there's a lot of different things happening, if you look at markets that are up, markets in every state that are actually increasing and shortages of inventory. so it's not -- these are macro numbers, like the s&p. when the s&p index goes up, it's not that every stock is going up.

>> too bad. >> one question on household formation. because rental prices are getting so high, are we beginning to see people opt to buy instead of rent? >> it's a very significant factor that rental prices are going up and that seems to be a positive indicator for the housing market. eventually it should communicate. >> you never hesitate from making a projection or prediction. here we are in '06 and you say that we are going down. give me your take. are we going to have this conversation at the end of the year or has the turn finally come? >> i think we have a lot of good news but it's not strong good news. permits are up but they are still at very low levels. my guess is that it won't be dramatic. the next year will look kind of the same. >> you know, buffett says buying a distressed house and buying a 30-year mortgage is the best

investment idea right now. >> it's affordable. housing is very affordable. so it wouldn't be a mistake. i still worry but it wouldn't be an obvious mistake to buy a house now. >> it's difficult to get that. >> that's true. >> thank you, gentlemen. good to see all of you. >> good to see you. >> melissa? >> we showed you the video. it's the biggest whoops of the day. a german waiter spilling five beers all over the chancellor's back. tweet us, how would you caption this video? our handle, of course, is cnbcsquawkst.

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just under six minutes before the bell rings. time for cramer's mad dash before the opening. >> apollo group? >> barclays upgraded this morning immediately following up with in hindsight our timing of apollo group was poor. hey, there's an obvious one. this one has been as many

for-profit stocks, i've got to tell you, sell, sell, sell. i don't see any turn around here. >> and that's also looking to open at internet bubble. priceline, the analysts are also positive and seems to be firing on all cylinders. >> the models have changed. bookings.com has gone great but priceline has seen little impact. we keep waiting for someone to say, i'm seeing a big dropoff in traffic anywhere. i'm not seeing a big dropoff in traffic. give me a break. or you miss it. sometimes it's better to say you missed it. >> trans canada is another one. yesterday they resubmitted their plan to chop up the pipeline. does that accomplish getting oil from canada to curbing? >> no.

this is about getting oil to curbing. by the way, i prefer well ahead of doing that, once again, not new fossil fuel. the president is really against and what the sierra club is against, they are running the philosophy right now is dirty fossil fuels and you are getting dirty fossil fuels from canada. not from the united states. >> all right. toss it over to carl now. >> opening bell. just a few minutes away. they are getting on the podium. i'll bring that to you live when we continue with ""squawk on the street."" don't go away. >> announcer: coming up, with our new set right below the opening bell, we're putting in our ear plugs this morning. things are about to get loud. which of these 500 stocks are you listening to? "squawk on the street" will be right back. carfirmation.

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over here at the big board, there are infrastructure funds and over at the nasdaq solar senior capital, a managed investment company. >> well, at the same time, alerian is a terrific for investors at home. i'd be careful not to do it. sometimes the restrictions and tax concerns have been great yield getters. it's worth it to do that. >> what's going to be the big dynamic? is it about tomorrow's tro? >> i think jamie dimon -- what is it, a 3:00 speech?

and and second upgrade in two days. bf of a saying we've talked about cutting costs. this time it really does represent changes and under owned benchmark. that's not exactly the benchmark. >> what do we really want from proctor? strong revenue growth. some of what colgate and it's kind of amazing. i mean, i almost feel like you sent me there. and there is so much staff. so much r and d. they are so slow. this is not the proctor. go back and listen to conference

call and they could be cutting advertising to make the numbers. >> and you are all over their case? >> i have to be. and you've been tough on both. and suggesting big like structural change? >> proctor. >> you backed off a little bit. >> i keep coming back to proctor. the proctor was an incredibly well-run company and when i see the kind of overhead that they have to cut, i wonder, what the heck was going on in the last four or five years and emerging markets, that is where the action has been. why did colgate out innovate? i mean, i know people look at the technology companies, colgate is coming up with new products day to day and that's

why colgate is still the one to beat. >> apple is trading higher once again and there is a fresh intraday record high yesterday. 528.50. amid all of these reports out there that it's starting to pull off the show. the ipad 2 or discounts in order to make room for the ipad 3 which will hit the market. >> and new york post reporting best prices of the ipad 2. signs that inventory is clearing. >> march 7th, i believe, is when you'll see that. >> steve jobs apparently had as much as ipad 6 on the drawing board before it passed away. >> really? my sources were so far ahead, multi-year with this man allows the stock to continue to propel itself. some of these $500 stocks, how

about priceline nearing that level? i find that there's a lot of momentum in stocks. surgical, 515. these are stocks that retail investors tell me, just divide by 10 and got a $51 stock, $52 stock. be creative. that's what warren buffett, he never splits the stock and a lot of money was made in the old days. >> the beast? >> you don't want to buy one share, three shares of something. deep with the money calls, stock replacement strategy. >> you know who is waiting over by the telestrator? >> the man of bp. >> and i'm having a lot of fun being the weather man for the stock market. did you see what dropped the futures? crummy durable goods numbers. look here what happened. good heavens, we lost like six

handles when the durable goods came out, below expectations. the problem is that we had a depreciation 100% that expired at the end of december. a lot of companies pulled forward durable goods into december and that hurt january. you can ask yourself, why didn't they know that? why wasn't that in the estimates? that was a major factor. you'll have to see if there are any revisions going forward. david, you brought up a really good point about the ecb. we've been wondering, how much of this money did the banks actually use? bring up some of the stats that the ecb published last night. they did go out and buy euro bonds. southern european, italian banks and spanish banks dramatically increased their holdings of euro bank debt here. up 13% and 29% in december and january over the overall holding. that's a significant increase. some of this money clearly went into buying bonds. that is the carry trade. they buy at 1%, borrow 1%, and go out and purchase 3 and 4%

here, david. but they can do a couple of other things as well. what the banks are doing, they could roll over their existing debt. of course, they have a lot of their own bank debt. they could play the carry trade which shows what they have been doing. they could lend it out, good heavens, are they doing that, or sit on it and hope that things will improve and use it to improve their liquidity capital conditions. they are not lending a lot. separate numbers indicated that they lent actually $1 billion than in december. december was a very weak month. >> and when it comes to the expansion of the european economy, credit is still contracting over there. and that's a key point. they are not lending the money. there's also a bit of a stigma attached to the borrowers the first time around. you take that collateral and then make the collateral that you gave to the ecb, so your

credit spreads out a little bit. something to watch for this time. will it actually lessen those banks to go? they don't want to get more of a stigma. >> my question is, has this helped? has this big facility, a second ltr facility. 400 billion euros, has it helped at all in europe? here's four points to consider. the euro is near a three-month high against the dollar right now. italian, ten-year yields. 5.67%. remember when they were over 7% in december? the euro zone bank shares. some are up 20 or even 30% since december. and they started that first ltr. finally, the ecb -- and i think this is significant -- has bought no sovereign bonds in the last two weeks. remember, they are buying these bonds when they see signs of stress in the market. the fact that they have stopped buying them, at least is a

favorable indication. certainly i think you can make a plausible argument that the effort to flood the market with cheap liquidity has calmed things down a little bit. today, by the way, you heard what was going on in greece. here's a real mess going on. all of these greek banks are going on here. the word is that they are not going to be able to put up their own greek debt as collateral for tomorrow's ltro. but the fact that the greek bank will not be able to participate or at least use their own greek debt as collateral is affecting all of them. of course, there are other kinds of collateral or they can borrow from the greek central bank. i think it's been a problem. >> what other collateral, i'm not sure what they have. but i guess the ecb will take anything. almost anything. >> right. >> thanks, bob. let's get over to rick santelli. let's go to the cme group in chicago. good morning, rick.

>> good morning. it's fascinating because part of the reason that yields are going down, as i talk i want you to look at the ten-year in the u.s. the ten-year in europe and ten-year in the uk. you'll see that all of them are making the lowest yields for the month of september. part of it is things for ltro, quantitative easing money. but part of it is disappointment without all of that liquidity pushing certain metrics. durable goods on this one. as these rates come down, we're also seeing another phenomenon today. february is a big corporate issuance. as we move towards the end of the month, we're seeing telecom, burlington, and we want to pay attention to see if this is one of the biggest months of issuance in dollar denominated

terms by highly rated investment grade firms. back to you. >> rick santelli back in chicago, crude oil down a little bit. still below 109. let's check out the latest moves in energy and metal. sharon epperson is at the nymex. >> i'm standing where the market is in the metals market. keep in mind, we have seen all of the injections of liquidity, quantitative easing, since the beginning of the year. gold is up $180. silver price up 25% and they are about the biggest gainers in the market today as well in anticipation of the ltr. keep in mind as well, copper is at a two-week high. we're also watching, of course, the pullback in the energy complex for the second day in a row and a lot of it has to do with the high prices and impact of the global economy on demand and that coupled with the tact that we haven't heard a lot of

rhetoric over the last couple of days. that is prices here seem like 110 with a bit of a ceiling here for oil prices in the u.s. we'll see if that remains for long. david, back to you. >> all right. thanks very much, sharon. shares of cable vision with a rare update of the provider here in the new york area and other regions of the country. up 4%. the company reported earnings this morning, fourth quarter earnings and they were earnings. cable revenue is a bit better than anticipated. there has been a lot of concern about how many customers they were losing on the video side of their business. there is significant competition from verize zon and not as much as anticipated, total of 11,000, adding in high-speed data and invoice. they slowed their buy back but ultimately it appears that it

was a number given diminished expectations that came in better than anticipated. still a lot of questions from this company having lost their key operator, of course, in rut ledge who went to charter. you're going to have tim dolan on a conference call, which is a rarity. >> he's going on calls these days. i am told that dolan will be on. and our parent company, comcast, time warner cable, the giants in the industry. >> we have directv doing good numbers. what are people watching? where are all these customers coming from? >> a lot of it, though, is an expectation that things are headed down and they are headed down as nearly as many people anticipated. >> basic is doing well, right? >> basic is doing okay. there is something in there and you can't try and draw a bigger

macro picture. and, yeah, it's not happening. the belief that people are going to turn off their cable, at least not yet. >> i think it's amazing. i think it's a hormone issue. people are having babies and they are moving out. it's household formation. great call. >> we'll keep an eye on cablevision, having a rare day at this point. melissa, back to you. >> let's welcome kenny bank. it's great to have you with us. >> it's a pleasure to be here. >> i would imagine you're in high demand in recent years particularly as people are reaching for any sort of yield. what has been the interest level in the past couple of years? >> you've actually hit it on the head. people are looking at where the ten-year treasuries are at and where do i get my income where i

traditionally got it? and there is master limited partnership and because of the after-tax opportunities that come from investing in mlps, that's a huge part of the story. the other part of it is mlps are the only way to invest in the long-term buildout and a lot of people are focused on that as well. they look at the stability of the cash flow, the business model and say to themselves, there's a lot of volatility in other asset classes that are very sensitive to the economy and look at mlps and say, that's what i want to be invested in. the cash flow and stability that comes from that allows me to have more protection from my income as well. >> people think of the infrastructure fund that it differs. >> it's going to be the commodity price sensitivity. for example, from pipelines, we use the example of a toll road. if you drive an as ston martin, a honda civic, either way, you get a toll. it doesn't matter which part you are driving.

as long as you have two wheels and an axle, you're being charged. as a result, again, of that energy demand and how dividend income will be taxed as ordinary income? >> some people look at the taxation element of it. with the budget deficit, the other side of the argument is that you look at mlps, $270 billion of market cap, two-thirds of exxonmobil by itself. they look at that and say it's crucial in terms of energy security. to attack it specifically would be very damaging as well as the energy security of the united states. >> kenny, great to talk with you. carl, back to you. >> no austerity when it comes to

brew. merkel gets doused with beer. how would you handle this? as we go to break, some of the early movers with the dow down on this tuesday. ♪

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time now for squawk on the tweet. how would you caption this video? chancellor, i thought you said you needed a wave of liquid, not liquidity, my mistake. when it's all said and done. and just as we've served.

>> i don't know. >> that's a lot of different ways to play this. >> on pbr now and david is not going anywhere near the beer discussion. there is more "squawk on the street" ahead. coming up, jim cramer is still getting settled into our new set. that's no excuse for slacking. we'll get him moving when "squawk on the street" returns.

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all right. we're getting closer to 10:00. >> good morning. should jpmorgan be broken up, we're going to have the ceo of

intercontinental hotels and they will half a billion dollars a share buyback and loyalty programs of all things. that's in the next hour, guys, back to you. >> thank you, simon. with auto zone estimates with 8% sales increase. >> this is one that has been maybe the foremost company in the country. that's not what we need as much as binge tv. >> dominos pizza? >> this is just blowout. >> it gave you a gigantic dividend. coming your way on the stock and on the show tonight. >> catching a downgrade at

oppenheimer. >> come on. >> after an upgrade yesterday by goldman, bernstein, $50 price target? >> doing great. what specifically do you want to know about it and what does jim cramer get on his pizza? >> meat lovers. >> my daughter and i -- the vegetarian and cheese. i use the no cheese option. when you have the apple app, it does not have a no cheese option so you have to use your desktop. i think that's discrimination. >> you have to use your desktop? >> i can't risk having cheese. >> i assume commodities are going to be an issue for -- >> remember, it's a franchise

model. one of the things that dominos is doing in india, why am i mentioning the vegetarian? because they are vegetarians. i think it's going to take india by storm. the apple download app, i am not kidding. >> what about the super bowl? >> we should get a read on that. one of the things that people underestimate about domino's, this is a company that didn't matter. pizza tasting like cardboard, that was a real turnoff to me. once it started taking like pizza, i love it. the banana peppers taste great. you're set. >> even though the dow is down on 6, we have a couple trading days left in february. typically a weak month, jim.

usually february is not very good. but oft 25 times that the s&p has been up for january and february, it's end of the year positive all but once but generally a good signal. >> i think we do have some things going. remember, i don't want to put -- we need no iran/israeli war. someone needs to blink there. >> thank you, jim. in the meantime, don't go anywhere. consumer confidence straight ahead on "squawk on the street."

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70.8, the best read in a year. last february we were at 72.0. now, remember, i'm not sure the cutoff date of the survey, but energy crisis impacts confidence adversely. this has no adversity in it at all. and also a february number moves up to 20. we're expecting about two-thirds of that. 13, 14, 15. 20 is the best read and the year

ends well. last february the richmond fed was at 24. both these numbers go back a year on comp and the real issue is, is this already, even though it's february, old data or not? that's going to give you the next trade. back to you. >> thank you very much, rick santelli. the euro competence numbers were better than expected. one more dose of breaking news. out with the earnings report, hampt hampton pearson has more on that. >> the number of problem banks, to 319 billion. there are 18 outright bank failures in the fourth quarter.

perhaps the best news, banks earning a 20% increase from a year ago. the key factor is lower loan loss provisions. two out of three banks reporting higher earnings income from a year ago. however, overall revenues continue to show weakness. in the fourth quarter we have net operating revenue of 3.8 billion. that actually was a 2.3% decline from a year ago. the biggest factor is a 7.4% drop in noninterest income. summing up the overall report from acting fdic chairman, martin greenburg. the industry is now in a much better position to support the economy through expanded lending but the level of troubled assets at problem banks are still high. carl? >> hampton, thanks for that. not just adding up for google plus as it struggles for a foot hold. it catches up to facebook. we look at the mounting minuses.

>> rising gas prices taking a bite out of discretionary income. does that mean fewer vacations? we find out from the intercontinental hotel groups. >> jamie dimon and jpmorgan while morgan stanley examines the effect of the possible downgrade. the banking sector just ahead. >> and apple trading at all time highs just moments ago. we'll take a look at that issue. >> and a few headlines we're watching this tuesday morning. yahoo! and facebook paying license fees all risk facing a lawsuit. we'll talk later about the growing pressure on facebook. >> they are dealing with a proxy fight with a position that has been positioned ever so slightly. it's also interesting to see what they are firing on the legal front. >> they have 1,000 patents,

which i did not know about. >> who? >> yahoo!. to protect or to sell at some point depending on what the board wants. >> we know how tough it's been to monetize those assets. and it's interesting how so much is going to ramp up. >> meanwhile, lowering the price on the ipad 2. perhaps singling the release of a new version of the ipad is indeed eminent. a lot of discussion about the three coming out in march. faber says he's waiting for the sixth. >> i don't want to -- >> i have the original. the pad.

>> how does that work? >>. >> it does come on a day when the shares, as melissa said, crossed over 530, an all-time high. >> 531. >> yep. takes the market cap to 431 billion. half a trillion dollars. >> half a trillion and supported, many would say, by incredibly low still price to earnings multiple and growth rate that is accorded to those who follow it. that half a trillion mark we haven't seen that often. microsoft did reach $600 billion back in the late 1990s. sysco and ge well above 500 to 550 billion again during the late 1990s. that was fun. >> delivery of the ipad 3, meantime, apparently no later than march 9th. it gets unveiled officially on march 7th and will be available

for purchase a couple of days later. >> these are all -- there's so many apple blogs in the apple rumors sphere that tracks all of these things. is there a chip going into the product? it's a composite of all of the blogs out there. in the meantime, the case-shiller reporting calling for the lowest level since 2003. so you guys talked to the three gentlemen -- >> the fact that we had case-shiller -- >> and steve blitzer was here. it's not a great number. it's backward looking. but it's big for the continued

doldrums that our housing market defines itself in. by the way, durable goods demands was down for the last three years. >>. >> right. you couple that with this particularly not good news at all. no stabilization in sight at least in prices again for the backward looking -- >> and yet the consumer confidence. >> and richmond, too. some of the regionals are coming in relatively good. >> sufficient with survey data when you've had good weather. >> that's true. >> or a lot of the country had better weather. they just feel better. >> i don't know what was better than yesterday with 60 degrees and sunshine. if somebody took a survey of me, i would have been often charts. >> that does set up somebody's

isn numbers which we will get in a few days. the bureau of labor statistics will be delivering their number a week from friday. >> it's a leap day, an extra day of profit and sales and that helps as well. if you have a year on year comparison, shave 125 -- >> they will do that. the comps for february, that next year everybody who didn't do well had an extra day. >> true. in the meantime, in an attempt to catch up with facebook, dealing with privacy issues around the world. just months before its anticipated ipo. to help sort this out and what it all means, marketplace editor at "the wall street journal." >> nice set here. >> looking good. >> looking very good. i did it all for you. >> so these metrics on google plus, when they first outlined

the service, user numbers were impressive? >> user numbers are impressive. 90 million people. of course, facebook is 850 and trending upwards to every living speaker and computer in the world. but 90 million is not bad. >> but time spent? >> that is the catch right now. and we have a great graphic on the front page of the beat section in "the wall street journal." you can see. the time spent per month is about 405 minutes per month. that is a lot of time. six to seven hours per month. the number for google plus is three minutes. not a day. not three minutes a day? >> not a day. not a week. that's per month. and in some ways google says, hey, we're building lots of things around these services and spending time on youtube. this is not the only entryway into google. but head to head, facebook, google plus, carl, facebook is still -- >> and do we have any comparison

at all from facebook and whether people are setting up their accounts and done with it and came back to it later? >> yeah, we do. i was looking at the first article in "the wall street journal" which actually occurred in 2005. the end of 205. but myspace had far more users and far much more time spent than facebook. these things can change. >> >> but this is not a fair comparison. whatever the technology is and alongside the patent, doing what they have to do to stay up and stay fresh. this is not their core business. >> if you look at the multiples when it launches its ipo, when you look at what advertisers want, they wanted a more direct relationship knowing what their customers are doing and we built basically a semantic web that

describes every activity, every photo, every video all referenced through this index called facebook. google plus does not have that viability. it does matter long term. >> but they have google mail. they have all of the e-mails that i wrote for the last 10 or 15 years. for an individual -- they don't have the collection between people but to understand that person well, which is the primary purpose of an advertiser, that is a phenomenal base. >> but if you look at how facebook has evolved, you have consumer desires not expressed through e-mails. if i lacked an article at cnbc.com, i could show that and perhaps go around that. >> and the music pattern of users. >> correct. >> so it s it possible that they are doing better or are they doing far worse? >> i think that's a good question. my sense is that the numbers

translate the same way. but you're totally right. mobile is where things are headed. if you go on the new york city subway, part of our world, that's all you see them doing. it goes without saying. >> with is an android? >> it's more android. >> correct. but then you see why -- and david can talk about this a bit, the motorola purchase, they need to build an ecosystem and it might be around devices and android in a way that is around google plus, the platform itself. that's why they spent so much money. i think they are going to have a lot of problems integrating it. >> we don't really know exactly, are they really going to be aggressive in terms of developing new hand sets or integrate it largely for the intellectual property? but i agree, there's a lot of

questions about how successful google is going to be which is different than google. >> and 10, 12, 13,000 employees, integrating them into google, that's one of the great untold business stories out there. >> they are going to keep them separate, aren't they? i hear that they are not going to get the free lunch and -- they are a different company. >> they are going to have to spend $20 at the cafeteria. but like having been -- all of us have been parts of mergers. they don't always end up that way. >> but it's a dream. >> yeah, for a lot of the motorola guys it is a dream. >> and do they make the valuation richer? >> i think they do. people are spending time on facebook. they are interacting with each other. they are expresses likes and dislikes that touch the consumer part of people's lives. >> and we touched on privacy briefly when we talked about

google owning or having all of its e-mails for the last ten years but that is going to become a larger and larger issue, is it not, for both of these companies in terms of google and what it's doing, facebook, of course, and europe has a different approach. we talk about future concerns. i would question what your thoughts are on that. >> well, you know, we've done great stuff. i've really read some wonderful articles. people don't care as much as you think they do and or should. google is able to make changes to its products, same as facebook, and there's an uproar and then the world gets back to living its life online and i think in some ways there's an arrogance in the silicon valley that says we can change our product as we wish and people will go along. for better or worse. >> and in europe, the idea is the right to be forgotten. people will have to click into options to use it further down

the line. >> right. >> that is a bit of a change. >> i personally don't -- in my personal opinion, i don't necessarily agree with that. but everyone in congress has them. they are becoming a very sophisticated lobbying organization. they are winning. >> come back soon. >> i will. thank you. >> and we'll stay with apple clicking in, the largest u.s. stock by far but shares hit new high after new high. is apple heading for a crash? we've got a panel of experts ready to tackle the law of large numbers.

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raising the price target to $81 to 70. the firm reporting disruption in the metal price forecast. carl? >> gas prices holding steady at $4 a gallon. as consumers get ready for the pain at the pump, we'll go straight to the source. "squawk on the street" will come right back. [ tom ] we invented the turbine business right here in schenectady. without the stuff that we make here, you wouldn't be able to walk in your house and flip on your lights. [ brad ] at ge we build turbines that power the world. they go into power plants

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when it comes to gas prices, there's iran, libya, and the

national average for u.s. gas prices, $1.16. one year ago, 3.43 and last month at this time, $3.50. today, according to aaa, $3.72, which is the highest since june. even though the consumer confidence numbers we got a few moments ago were taken before gas prices really rose in the last couple of weeks. >> it will be interesting to see if it's anywhere near 70 in the next 34079. meantime, oil giving up the recent gains and continued instability in the middle east. time to go trading the globe. emergingmoney.com is in istanbul, turkey.

>> good morning. istanbul, turkey, caught kind of in the middle. it has a major impact from higher oil prices. every $10 move in oil shaves 30 basis points. so for turkey, for other emerging nations like india, south korea, higher oil prices are a major, major foot on the break. in the short run sitting here in the middle east and in the middle of this trade, i don't think that the supply disruption is part of this and i don't think it changes any time soon. >> so you would recommend sticking with the turkey etf? >> well, i tell you what. what i would say is that turkey, to me, is 75 million people with a demographic story that is one of the best in the market. turkish market is up 60% and has

pulled back on this oil market. the current market falls under what we talked about. i don't think you need to buy turkey if you think oil is going to move to $135. that's really your call here. if you're playing emerging markets right now, buy rush sharks buy brazil, short south korea, short end yeah, short turkey if you think this persists. if you're a long-term market in emerging markets, i've been seeing the best companies in the world, including glass makers and a market you want to look at. it's a great way to play that. >> tim see mother in istanbul, turkey, for us this morning. global trades with him every night on fast money right here on "squawk on the street." so how are oil prices affecting the hotel industry? not too bad if you look at ihg, which is up 25% so far this

year. joining us for "squawk on the street," first on cnbc is the ceo of intercontinental hotels, richard sullivan. >> good morning. >> so how is business? are you seeing gas prices impact what you're seeing here? >> it's been pretty good throughout the world. particularly asia and the u.s. we've seen a bit of a slowdown in the euro zone. >> and china is a key focus for you? >>. >> the hotel business is linked quite closely to gdp and the disposable income, you can see why china has been successful and the u.s. has been good in the past year. >> i imagine the flip side of that, the down side is you can't expand as rapidly. you need third-party spending. >> actually, the opposite.

we're working with thousands of different owners around the world. we have 4500 hotels opened. we have 1200 signed contracts. because we've got people all around the world that we can work with. >> in terms of your china expansion, when you're expanding into the second tier cities which are extremely large -- >> they are. >> are you finding that when i've traveled in china, there are a lot of government private partnerships in order to build the hotels. >> yes. in china, in fact, in the whole of asia and middle east, we manage the hotels because we run them all and we have our government entities. a lot of private as well. it's much more alike than it used to be. >> and you're confident with the contract law and everything else that you're dealing with in terms of the agreements that you reach with the owners of those

properties? >> great question. yes we are at the moment. people understand branding and the right way of doing business. lucky we haven't had to test it too often. >> and what is your overall thesis in terms of growth given that you have a ground view there. there are foreign business men, i assume, and -- >> they used to be. we're different to most of the competitors. we have 160 open, 150 being built today. and actually more than 75% of our customers are domestic customers. it really is a domestic business and it's so much going on and so much activity. >> the intercontinental barclay -- >> we are. the price target is $300 million in city rights when they speculate that you have half a billion dollar share buyback once you've completed that? >> that's linking it too

closely. we want to sell. it needs a big refurbishment, as you know. once we sell it, we will look at what is appropriate. >> half a billion dollars will be the order of magnitude? >> the balance sheet is very strong. our focus right now, to be very clear, is to invest in the business, to grow the business such as with the new brands as we've done in the past, we'll return it. >> southern europe is a problem? >> europe is 15% of our business in total. u.s. is about two-thirds. we've seen a lot of growth. i want to direct your attention to cablevision shares

and the outlook that was shared on the conference call has put is at least talking about programming costs going up and they also as well say that 2012 is going to be a year of investment and a year that they have yet to take an increase. now moving very sharply into negative territory, interesting reversal. it's based on the outlook from the conference call from the last ten minutes or so. >> and top three, s&p, 40 minutes ago. >> very nice. when we come back, warren buffett saying back from the brink is the proof in the pudding. jpmorgan meeting with investors today. is now the time to buy these

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today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.

and we are officially one hour into trading. here's a look at the stories that we're squawking about. here on wall street, consumer price index jumping more than 9 points in february to 70.8. that's the highest level in a

year. intel and micron technology, that and chips from micron? >> feast your eyes on this. and you can see is outperform. let's break it down. we are almost down and meanwhile, we have some break news for market reaction and that has hit the euro. and this will be a referendum on

the plan to greater coordinate and that perhaps is why we are seeing the reaction and the view is you don't get a referendum through the irish. would you like a referendum on this, and we had referendums and the prime minister if they did know that they could have quite severe consequences. clearly, they are going ahead, david. >> all right. we're one hour in. let's go to chicago for the

greatest moves. j.j., good to see you again. >> always a pleasure. >> you've been watching that, crude versus the spx and your theory as no one can be surprised, one is going to have to get here in the near term, right? >> you know, we've seen these to be highly koor lated, and we're starting to see the s&p outperform crude. what we saw was a give. at that point we saw the s&p coming back down. we have a future of 1375 koor lating to 1376 and we're starting to come up against resistance. so it's very interesting that we're coming up the resistance on the s&p 500 and it has outperformed oil. it's similar to the pattern that

we saw last november. down here it's something that has to give and it will be interesting to watch for the rest of the day because we're only five handles away from the s&p 500 big resistance level as they start to come out at that level. >> interesting. along with the vix lower since july and a lot of people talking about if you can contain it at that level or somewhere close to it, you're in a vix sweet spot, where it was in august 2010 and into february of 2011 right before the spring rally this time last year. how likely is that? >> well, again, since it correlates directly to the s&p 500, we have to get to this level on the future in order for us to get down there. i think the reason it was up, even though the s&p was up slightly and one of the reasons that you may see the vix for a little while is get the confidence that you can get through this resistance level on

the upside. i think those numbers are going to be highly koor lated on which happens and as we get through there, i will look for what you are saying, carl. >> j.j., appreciate that. we'll talk to you later. >> have a great day. switching gears now, u.s. banking is back from the brink. he owned shares at jpmorgan personally. what is on jamie dimon's agenda? mary thompson is there with the latest. good morning. >> hey there, carl. jamie will be taking the stage later today but investors are curious to hear from the outspoken ceo. investors appear to be fairly cautious right now despite buffett's comments yesterday. in the interim, taking the stage and giving their outlook on a number of issues including capital allocation and revenue expense outlook and a mortgage

scenario that dimon said the bank is getting killed on. key points that he brought up for 2012, net interest income and net interest margin will continue to come under scrutiny and what he calls the flight to quality deposits that are not sticking. the banks can use these deposits to make loans. that means they are not exactly profitable for the bank. that's continue to pressure and expenses are flat for 2012 and as far as revenue drivers, he pointed out the national business as well as loan growth. lastly, the bank s continue to look and make acquisitions in this regulatory environment. he touched on the exposure to the euro 5 or how ever you want to put that down to 1.5 billion.

also, they talked about mortgages. this is a business that jpmorgan remai remains committed to. carl, back to you. >> mary thompson at jm morgan, we'll be hearing from you soon. >> let's get a better perspective. joining us on the news line is dick bove. dick, what more do you want to know from jamie dimon today? >> well, frankly, i think in the connotation with the cfo they laid out the key things that we want to know. they indicated that they think that the earnings power of the company is roughly 33% above what the current earnings were or what the earnings were in 2011 and they suggested that they would pay out 30% of that earnings power at some point in the future which means that the dividend should get up to something on the order of about

70 from -- at the present time. the company has basically, therefore, laid out where they are going to go and what we will see as investors and analysts. are we going to get there. and our belief is that they have a strong enough management team that will reach the goals that they've laid out today. >> i think you've got a buy rating on the stock, a $40 price stock and the stock is bumping up against that. does that mean it won't go very much farther? >> i don't think so. i think we're seeing an enormous change in psychology and it's almost mind blowing. in other words, yesterday alone, you had warren buffett on indicating that he likes the way the industry is going. "the wall street journal" indicated yesterday that basically when they increase the dividends in stock buybacks.

they say that people should think about yesterday, again, that people should think about buying back bank of america and citigroup saying how good the bank was. in other words, what we're looking at is a complete change in attitude from the industry to what it has been over the past three years. as you know, melissa, what has killed this industry more than anything in the last three years is that -- it's the negative psychology. it's not negative any longer. >> the flip side of that, dick, is that you were advocating shares at a time when not too many people wanted to do that. do you see these positives? the sentiment has changed and step away for a while? >> not at all. i think that if you take a look at -- and we've -- over the last several days we put out a couple of these in which we're trying to show that the pricing book of

the banking industry of bank of america and jpmorgan is dramatically lower than historically all through the 2000. we've put it out showing that many of these banks, most of the top five, have more cash than they have market value. and since the cash is also in some cases greater than the book value, they are selling at discount cash. so when you take a look at this industry, based upon any historical comparison what what the true value of the companies would be, the fact is that either you've got to come to the conclusion that the industry will never get back to the multiples that it has in the past because it's something that is definitely flawed with the business model or that it will get back to where it was in the past in which case the stocks are still very, very cheap. >> right. all right. we're going to leave it there.

thanks for your time. dick bove. >> breaking news about new financial aid under the new bailout mechanisms will only be given to countries that ratify the new fiscal agreement. you may see that they decide that is a good thing after all. the record we've had of apple growing in both revenue stock price, blowing the competition out of the water. it's the iphone and ipad halo effect. here to receive a pitch, has apple reached its height for good? stick around. we're back in a minute. >> announcer: coming up, just how high can the apple tree grow? is there anyone out there with the ability to chop it down? we'll take a bite of the stock when "squawk on the street" returns. ♪

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a 532 apple hitting a high

again. over the weekend, best buy lowered the price of the ipad 2 by 50 bucks potentially signaling the launch of ipad 3, says the analysts. has the era for apple peaked? joining us is editor-in-chief. gentlemen, i don't know why but it's become very fashionable to come on shows like this and trash apple. are you about to do that? >> not quite. again, product innovation has been the core strategy of the company. innovation has been part of the dna and steve jobs called it the largest data company in the world. that is arguing that innovation peaked under its tenure, his legacy can have a long tenure. it will be very difficult for as

he was able to. >> we have breaking news here. apple is going to unveil the fourth quarter ipad 3 with 4g lte. how important is the detail on that announcement? >> well, it's critical. the ipad 3 has to be significantly different than the ipad 2. they haven't unleashed a and-new product since steve jobs died. this is a critical time for the company because other companies aren't catching up. iphone sets the stage and now android is the number one in the world. the tablet space is exploding. so if apple sits still, it's in trouble. but apple has made in the last

decade. unless the iphone 5, ipad 3 is flops, i still think the trajectory for apple is are yo upon the 4g lte is that the deal you were expecting? >> just basically a larger screen and faster processor and a better camera and the new interface. just for perspective, if you look at the ipod, revenues peaked in '08 at about 9 billion. now down to about 6 billion over the same time span. the ipad revenue has increased from nothing to almost 30 billion. and so i think the product innovation continues to dominate that segment. again a different perspective. about 15 million ipads in the march quarter. together worth 5 million max can represent almost one in five computer units sold in a worldwide larger share than hp and dell. >> you know, ashok, lte on an

ipad is going to be pretty darn robust. you're going to be age to i would think have realtime video wherever you go. be able to communicate conceivably with other people on their ipad. in some ways being able to use lte i think would maximize ipad. >> absolutely. i think last year -- >> ashok and then our other guest? >> sorry. yes, i mean, just to again for perspective. last year the market was 55 million units. i think the various forecasts that that tablet market is expected to exceed the notebooks in the market unit opportunity by 2015. if that's an area that pans out, and again apple is continuing to dominate that market with almost two thirds of the market share, continuing to expand, you know 30 billion annualized revenue opportunity. >> okay. guys we'll leave it there with our breaking news confirms by

cnbc ashok and lance. >> let's send it out to john ford as we continue to watch shares of apple rallying on this news up seven bucks to $532. >> what i'm hearing is that there will be an announcement next week and that actually the main location might be new york. which would be unusual, because a lot of product announcement, apple tends to do out of san francisco. but, i'm hearing new york could be a location next week. new york is a place, of course, that has plenty of media and publishing happening there. so if that is a main feature of the announcement, new york would make sense. but still waiting on more information about why new york would be the location. that is what i'm hearing. >> john. talk to us about some of the features. obviously we've already seen the lte element of this on our screen. others, "new york post" reporting this morning that a

siri enabled ipad is likely to be what the 3 is all about. any color on that front? >> definitely expect that. siri should probably be spreading across the product line. but i think a higher definition in screens, and in cameras would be a key feature of this device. and that the upgraded chip inside, whether it's dual-core or quad-core we'll have to wait and see, would be capable of handling fluid graphics on those high resolution screens, and dealing with higher resolution camera images out of the device. >> jon, it's david. when you have lte, 4g, the cell phone or wireless providers have been having a hard time with battery life. i don't know if that's going to be a concern here as well, if you've heard anything. it can churn through a battery pretty quickly when you're operating at that spectrum. >> the advantage that apple has in this case is that it controls the chip, it controls the software and the os and it can also do a number of things inside in terms of the battery

size. so, it's got so many things it can tune in terms of how it decides to manage performance, that battery life is likely to be the same as the device today, even if it's operating on lte networks. from what i've heard on the conversations i've had, apple has the capability to do that. >> all right, jon forththanks so much for that. we should note that apple, a fresh high today is $533.20. so it did cross $533 a share earlier today, as we did get news of the quad-core chip. and 4g lte. the announcement to be made next week which was expected. it was expected on march 7th with the ipad 3 to be on sale on march 9th. >> we're about to find out how much of this has been priced in. apple is clearly helping the s&p get above 1370 just now. >> meantime priceline is another stock helping the s&p, as women as the nasdaq, up 8%. the stock has been on a monster run up 40% in a year.

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wall street estimates with a 66% jump in earnings. mike, what is the biggest wild card for this priceline story when it comes to the stocks specifically? is it a weak europe, or is it gas prices where they are right now? >> well, i think in general, you know, i think one big wild card is just investors starting to really recognize what's been going on here. that is that this is a company that's growing that greater than 50% over the last ten quarters, and trades at a 17-times multiple. so i do think increasingly we're going to see investors kind of focusing on the fact that these guys are growing at a very high, sustainable rate. >> sounds like you're advising investors to take profits at this point. is that the case. are you saying investors are afraid of stocks at these levels with these p/es? >> i think they're starting to get some of the credit that they really deserve. and i think that in general, given the penetration opportunity they have in emerging markets we're going to see certainly, you know, growth

north of 80% in emerging markets continuing. and that's definitely a huge positive going forward, and i think 2013 will continue to see growth rates for the overall company north of 20%. and for that reason we think it should trade at a greater than 20 or greater than that multiple. >> wow. all right, we're going to have to leave it there. we appreciate your time. mike olness from piper jive ray. cnbc has an exclusive at 4:00 on the closing bell. >> 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. >> in greece we are sustaining the unsustainable. and it comes at a cost. and the cost is a society that has to put up with tremendous austerity without seeing a light at the end of the tunnel. >> in the big picture, the most notable thing about this recovery since the very bottom in june '09 is how weak it is. >> down four, down 4% on

headline durable goods. this is much worse than we were anticipating. we're looking down 1% to 1.5%. >> this stock has failed to ignite. and one of the reasons i think is because all we ever hear when you break down what's really going on, net interest margins are horrible. >> the index is down all three composites, all new lows. something of a disappointment obviously. and continuation of the trend for the last several months. >> the opening bell on "squawk on the street" and a look at the s&p 500 at the top side of your screen. >> we have some wild numbers here. consumer confidence for february, 70.8. yes, 70.8. >> the facebook time spent per month is about 405 minutes per month. that is a lot of time. six to seven hours per month. now, the number for google plus is three minutes. three minutes.

>> not per day. >> not a day. not a week. that's per month. >> good tuesday morning. markets higher across the board. get a check on some of the major indices on this tuesday. the dawe, the s&p, the nasdaq hanging on to gains. the dow above 13,000 although we know how difficult it's been for the index to hold that level. apollo and the for-profit education stock some of the biggest losers today after apollo slashed its second quarter enrollment forecast. "washington post" and devry are in the red, as well. story that just hit, apple hitting a fresh all-time high today. several blogs and now cnbc confirming that the ipad 3 will be released next week in new york. and will include a quad-core processor with 4g lte technology. sources tell your jon forth that new york is a likely location for the unveiling and apple shares are a few dollars away from a market cap of half a trillion dollars. voters in michigan and arizona

will have their say today in the republican race for president. who will claim all of the 59 delegates at stake? we will head to detroit for a preview. then cruise lines hit some rough waters. carnival dealing with its second cruise disaster this year. is the stock still worth a buy? plus the ecb's injection of cheap cash pushing european shares higher today. but will that last? we'll find out when markets overseas close in less than half an hour. and corruption in news corp. new information coming to light about the alleged bribery at the company's british tabloids. all of that coming up in the next 60 minutes. we'll start with skwaugs on the beat. michigan and arizona heading to the polls today to settle a tight race between two top contenders, mitt romney and rick santorum. chief washington correspondent john harwood is live in detroit with what's at stake in the republican race, and john, definitely likely to be the more interesting race of the two, right? >> no question. arizona looks lopsided for mitt romney. but michigan could not be tighter.

you've got a race, look at these numbers from the latest polls in the last couple of days. mitt romney with the barest of leads. about a point and a half when you average the polls together over rick santorum. just a one or two points separating these two in either direction. one of the interesting oddities of this race is that despite president obama's claims, mitt romney opposed the auto bailout. so did rick santorum and yet their prospering in this race. republicans generally speaking don't like it. and you saw that from rick santorum yesterday when he gave some remarks and explained why it is that capitalism has to be painful sometimes. >> capitalism is painful, we all know that. markets are painful sometimes. when people don't keep up, and people do things that the market doesn't like. a lot of people suffer. but they suffer more if we try to rig the game. i've been consistent on that. i can go after president obama on that. no one else in this race can.

>> and that's the interesting part, carl, is that rick santorum, even though he also opposed the auto bailout, is attacking mitt romney for that, because romney did support the wall street bailout. he's saying that's hypocritical and he's using it to try to draw votes from independent and democrats who are free to vote in this race. very interesting if this race is very tight whether democrats crossing over could make a decisive difference for rick santorum in this race. >> and, john, the way michigan has tightened in the last couple of weeks, the way rick santorum's unfavorables have risen in the last couple of weeks, do you see that as the result of the same machinery that brought down gingrich in florida? the same machinery that romney has to roll out when a new rival raises his head? >> depends on your frame of perspective. certainly he has come down from the significant lead that he had over mitt romney after winning those three contests a couple of weeks ago. but in the last few days he has come up a bit, recovered a bit here in michigan, and part of that, carl, is due to some of

those very controversial statements that have gotten him in hot water with independents elsewhere, like talking about the separation of church and state. the conservative christians in western michigan that he's counting on like that kind of rhetoric. it could actually be helping him here. >> all right. thank you very much, john harwood. going to be an interesting day in michigan and arizona. for more on the primaries, joined by former senator judd gregg with us, former governor and three-term senator from new hampshire and a mitt romney supporter. good to see you again. >> great to see you, carl. >> let me get your take, first, how do you call these races tonight? >> well, i have no idea. i don't think the polls probably do, either. as john accurately pointed out, michigan is an open primary. so you know if some people get charged up on the democratic side and want to make a point, are getting a message to go and vote, that's going to change the dynamic of michigan significantly. i don't really have any idea what's going to happen there. to be honest with you, i think much too much weight is being

given to this whole exercise in michigan. i happen to believe that down the road, it's going to be a mitt romney nomination. i think that for a very simple reason, that kwhon sense kicks in and republicans are, if anything, they like to be tied to common sense. and common sense tells us that really the only candidate we have who can run aggressively against the president is mitt romney. unfortunately i think rick has marginalized his ability to communicate effectively in a general election because of his extraordinary strident statements on issues of social policy. >> i assume you're referring in part to his comment about college education, or is it more about church and state for you? >> no, i think it's more about the fact that independents aren't all that charged up on social policy issues. some are, but most are interested in fiscal policy and how you make the country stronger and how you make it more prosperous and how you create jobs. whereas rick is running a social policy campaign. he wears his social positions on

his sleeve, and he has actually said if you don't agree with me, you're not christian enough. and that's a little harsh to take and is actually not a very christian attitude in my opinion. >> yeah. so are you saying, senator, that if romney loses michigan tonight, it does not throw the race into some mode of chaos? >> well, it will as far as the pundits are concerned because pun didry needs chaos in order to be successful. that just gives people things to talk about. but i don't think -- i honestly think that mitt gets the nomination here because as i said, republicans are, if nothing, they're tied to common sense. that's one of the things that defines our party. where we're a very rational group of folks usually. and if you're going to look at this race and you want to win the presidency, the only person who can do that in my opinion is mitt romney. >> and so you would be counting out, even at this late stage, you'd be counting out the entry of another player, some other player who has not yet entered this race? >> you know, i've heard rumors

to that. i actually read a couple pieces from pundits on that point. but i think it's pretty hard to enter at this point. first off the calendar is very much against you. and secondly, i'm not sure you can qualify in enough states to get positions to get enough delegates to carry the nomination. i think it will be an extremely long shot if somebody would step in at this time. and really, i'm not sure it would be all that constructive to the party, exercise of trying to get on with beating the president of the united states, who most republicans feel is not governing very well, especially on fiscal policy. >> a lot of republicans waiting for that process to begin. senator, good to talk to you. thanks for the time. senator judd gregg joining us from manchester. gary kaminsky for his first day joining us as we're on this new set and hopefully you'll be spending a lot of time with us on this set. >> yes, congrats. looks beautiful. good job setting it up there, carl. before we get to what i had planned to chat about, you

brought up that apple chart. do you remember what i told you the last time we were at the new york stock exchange about a month ago about apple? which was that every institution that didn't own that stock every pullback is going to use every b.s. opportunity they could come up with to get initiated in the main, you see the chart, give me a little kudos for that one. >> a lot of kudos. we just got some hard, empirical evidence of just how underowned it was last week. >> that's why it's just so important to understand the institutional mentality. again it's the institutions that really drive the stock movement every day. i want to talk about institutional mentality as it relates to berkshire hathaway. obviously warren buffett has been in the news over the last three days. a lot of public appearances. the shareholder letters, and i just want to sort of go through a couple of things in the last couple of days. again, understand in the institutional mentality is very important. let's talk about the first thing. he talks about succession. it's important to understand

that berkshire hathaway is a closed-end mutual fund. you can say it's not but it is. that's how people look at it. if you're going to decide it's important to get the succession issue out there, i don't think that they've given any added value the way they've done it. if you know who is in line to potentially succeed, don't just say we know who it is. say who it is. people should know that there is a plan in place because, again, the biggest concern of the institutional buyer is, what happens to the company's value, versus the net asset value, if, in fact, something happens to warren buffett? so no added value there. number two, jpmorgan. i wanted to pull the clip, we couldn't get it. apologies for the back. andrew sorkin asked warren the other day, i wanted to get some thoughts about the banking business. i know we don't have that much time. praised jpmorgan, and again i realize that you are not an investor in jpmorgan and i'm curious why not. buffet responds that he owns it, i'll let you know the secret. i own it personally. maybe it's just me, but i -- and again this goes back to the fact

that i spent years and years professionally managing money for individuals and institutions. if i ever sat in a meeting and i said to the manager of a pension plan, i own the stock in my personal account, but i don't own it in the fund, you know what they would do, carl? take the money. the money leaves. you can't own a stock in a personal account that you don't own in a fund. and thirdly, bank of america. he talks about bank of america, clearly he's got the big investment now. and he makes a comment yesterday about the fact that management was handed a bad deal. management was handed a bad deal. nobody disputes that. but brian moynihan, the ceo, and let's just bring up the resume here, he was with the company through much of the 2004 through 2011 period. here's some of the resume here. to simply say, moynihan was not involved, he had senior management roles, yes he's trying to fix what happened. but to say he had nothing to do with building up that fact, that's just b.s. >> yeah. we remember ken lewis.

you're not trying to discount the influence of ken lewis. >> absolutely not. but moynihan was part of that team. the perception of a lot of people, and i was inundated with e-mails about this yesterday, the perception was moynihan came from the outside. he didn't come from the outside. he was an insider. he worked very closely with ken lewis. he was general counsel for a lot of those acquisitions. he ran the wealth management business after the acquisition of fleet into bank of america. the point is, and i could go through many more of these things, if you're trying to understand some of the reasons why berkshire may not be as institutionally owned, these are some of the reasons. it's just good to get the other side of the story. >> all right. talk to you in a few minutes. gary kaminsky back home. check in quickly with rick santelli for the santelli exchange. rick? >> well, i find it interesting that ireland is going to be the first to vote on this fiscal program that was put forth in december. the easiest way to frame this, 27 countries are members of the

eurozone. however the brits didn't want anybody working into their fiscal issues so they bought out. the czechs, they didn't want it, either. but you have 17 countries that share the euro currency. of which, of course, ireland is a part. so this is the first real test of not the group of what was 27, which is now 25, but the group of 17. this road on the irish side is very important. and if you look at all the other times, they put serious bills or treaties to a referendum they've always seem to drawn concessions to ultimately approve it. those have ranged from tax situations and treatment to military. so the concessions may be a big issue. mf, today article, a couple of subpoenas by the regulators and an entity with cme executives. why do i keep bringing mf up? because after talking to traders today on this cranes article, i will simplify the way this is

boiling down. if mf was the custodian of money it really didn't have control of, why are those funds being thrown in to a normal bankruptcy to give potential bond holders life, asset managers and large hedge funds? that's really the issue. last but not least can we trust today's numbers regarding confidence when we know energy is going to alter the scene a month from today? that's the big question for your next trade. carl, back to you. >> that's absolutely right. thanks very much, rick. when we come back another hit for the cruise industry. carnival's costa "allegra" is crippled in the indian ocean. the second emergency situation for the costa line so far this year. we'll get one analyst's take. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade,

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all right time for an energy check on this thursday. we are headed lower across the board. nat gas the biggest decliner followed by gasoline. crude is off 18 cents. crossed $109 earlier in the week. currently at $108.38. carnival's crippled costa "allegra" being towed toward the seychelles. this is the second accident in the last two months for the costa line. how will this impact the stock and the cruise industry. kevin is an analyst at jpmorgan. >> good morning, carl. >> i'm wondering after the "concordia" and now the "allegra" if we're running out of costas. if this is the straw that's going to break the sector's back? >> this unfortunately is the second negative event for the costa brand. couldn't have happened at a worse time now that we're in the

heart of the wave season. you know unfortunately, i think this current -- this event will have a modest impact so we're thinking four to five cents. if you look at the premium they have to pay with insurance, and the loss of capacity for the "allegra" the overarching issue is what impact this has on the european pricing situation, which in our minds was already impaired with the "concordia" incident. >> how bad was it after "concordia"? we had talked to some analysts shortly after that incident and they said, look, it's really hard to tell, the models don't build in pricing models. it's difficult to price in events like this. >> it's very hard. and what the companies did, and what we saw in our research, is that the companies actually didn't drop price. what we think happened is occupancy levels fell off and booking demand fell off. eventually the companies are going to have to work with price. i think an event like this is only further downside catalyst for pricing to deteriorate over the next couple of months.

>> you were at an overweight now at a neutral? >> yeah, neutrals on both royal and carnival. >> and with the price target of 30 i guess you're curious to see if this is going to hold a two handle or a three handle? >> yeah, i think, we see the stock trading into the kind of high to mid 20s. you know, we're on the sidelines for both. i think there's probably more risk here in terms of ticket pricing. and then lps you look at the fuel environment right now, you have bunker which has risen 10% to 15% since carnival last reported. i think that's the biggest risk at this point. currency to an extent will be helpful for both companies as the pound and the euro has come back in the quarter. >> yeah, one of the few tailwinds they have at least for now. kevin, appreciate that. >> thanks for having me on. >> over at jpmorgan. counting you down to the close in europe. about 7 1/2 minutes to go. get you the action there live when it happens. [ male announcer ] technology accelerates at a relentless pace.

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since june of 2008. we're back with the european close after this break.

we got the nice bond auction in italy. some consumer confidence numbers out of europe. simon hobbs going to walk us through the close in the uk and across the continent. >> 5:00 tomorrow morning we get that second ltro.

that offer of unlimb theed funds at 1% provided you've got the collateral from the ecb and the debate goes on as to how much money. it was half a trillion euros give or take last time. my question would be whether people are going to use this as an opportunity to construct an argument to sell the market. because you can see the way in which simply december 8th announcement that we have, and people worked out exactly what it meant on the first ltro from the ecb. how we've -- how we've made gains, substantial gains on those equity markets. it's just -- the question would be whether they book profits there. and if you look at the bond market as well in europe, if you take at spanish and the itali a bonds, and those are the prices, not the yields, you'll see you've made 13, 9% on those. the question will be will they use it -- there's many reasons why you could construct an argument that whatever figures they come out to tomorrow may not be sufficient to sustain the rally. so, we'll be watching that, carl, as we -- before trade tomorrow morning.

>> yeah, the ltro will be the last case of easing of substance for awhile. and in his view the rally will end within days and what he called the post qe hangover. >> the markets are closing now. >> as you can see most of the markets so far today, just to elaborate on the other reasons why you would construct an argument, you could say yessist the last one, carl. there's a law of diminishing returns. you could say the market has overestimated the degree to which the market has flown in down the ten-year end of the bond market. you're beginning to hear that sort of sound coming out. also the belief that you might have zombie banks being created in europe. we'll see, it's very much a play on the expectation. the bigger the expectation is 500 million euros. but for many houses that is now beginning to fall back slightly. >> yeah. the number -- 5:00 a.m. >> 5:00 a.m. >> you get up early. thank you very much, simon. rick santelli i believe has a

guest out in chicago. >> absolutely. with all the news out there i wanted to talk to dan. first of all with regard to ireland. they have a history of drawing some concessions on some of these key votes. any thoughts on the at least preliminaries, as everybody tries to discuss what the fallout of this vote may or may not be? >> if they decide that they don't want to ratify this you've got some serious problems on that one. the odds are they probably will. but will they draw concessions as you mentioned earlier? it's quite possible they won't. but this is relatively important, even though ireland is not a major country to speak of. it is major in the whole impact of the euro and the eurozone. >> especially they are one of the 17 that share the currency. >> right. i think it's different when the uk or the czechs say no, we're going to bow out of this, bow out of that. but as a euro sharing member i think this is more significant. >> yes. >> the ltro, pretty much tomorrow, and it's nonstop speculation. first on the size and then what the size means. so let's start out. where do you think it's going to

price in sizewise? all thoughts seem to be around 500 billion euro. >> similar to last time. >> similar to last time. higher means they're going to be, and liquidity of the system. lower should help the euro. you know, it's a guess at best as to where this is going to come out. >> we know that the ecb gets treated differently in their positions of peripheral securities. is that going to be an issue if this is closer to a trillion? in other words, as we move through time, if this money is or isn't used to buy paper for the likes of the italians or the portuguese or the spanish, ultimately those coldings, being bigger or smaller based on tomorrow's number, could have ramifications down the road if we get into other haircut scenario. >> exactly. you see that greece took their haircut and some of the other countries, there have been suggestions that maybe they're going to want the same type of treatment. so, this is something to look forward, or not toward to, but look towards the future to see

how it will affect us. >> i look at it this way. the ltros at some point in the future, no matter what the size is, they pump things up. the u.s. economy, quantitative easing has pumped up stocks. but in the end, all of this pumping is supposed to be a pumping of a process where real investors down the road take the place of all this liquidity. meaning italy and these countries will be funded by real investors. if that doesn't occur, i don't care how much higher power the banks like the ecb have, wouldn't it be a lost gain at some point? >> it would. you're going to have to get confidence in these countries and it is the individual that's going to force that issue. >> i think we lose sight of that. the issue with all this help is to be self-us is feigning at some point. that's a discussion i haven't even heard yet. >> they're looking towards greece as to when they will be self-sustaining. they're talking 2015, 2020 maybe. >> just like the nasdaq ever reaching 5,000. you and i aren't going to be around to see such a thing. >> doesn't look like it.

>> thank you very much, rick santelli in chicago. half an hour or so since apple stories crossed the wire that they would launch the ipad 3 next week. some reports said here in new york. been, it was interesting how one piece of news like that had ripple effects all throughout the market. >> we're above dow 13,000 once again. we'll see 23 we can close above it. we were a few points shy of it yesterday. once again we're seeing some real moves in the stocks, not just around apple. put up some of the semiconductor stocks that are associated with apple and the ipad. you'll see some nice moves in some of these groups here. the important thing, apple is at a new high. look at sandisk. broadcom makes chips that control the touch screen. cirrus makes the audio logic chip in that. lg display. they make the display. lcd systems here. a couple other companies around here, like win tech that makes the specific part of the touchscreen.

nice move for all of these particular stocks. elsewhere, very choppy economic news today. i think that's part of the problem. one of the reasons we're having trouble moving things forward. take a look at how choppy this news has been. we've got durable goods. that's been a big disappointment. home prices were on the weak side. then we had consumer confidence. that's a good number. best we've seen in a year for consumer confidence. the richmond fed, expansion continues there. that's what i mean by choppy economic news here. some good news, some bad news. let's take a look at some other things going on. the vix. i've been asked repeatedly why the vix is at 17. look how low these numbers are here? 17. is it going to move at all? there's a lot of uncertainty sitting around that. you don't want to look at the vix cash bryce. you want to look at the vix curve going out several months. you'll see volatility is much, much higher. take a look at where you're looking in june for example. 26 on the vix. vix futures in august 28 and 29

going out into october. bottom line is right now, we're seeing low numbers, because earnings season is largely over, and remember the vix cash here only checks out for the next 30 days. they're not anticipating a lot of activity. but dawn out further in a few months there's still a lot of uncertainty and the vix curve is reflecting that. finally, guys, a lot of talk about what's happening tomorrow. mr. bernanke is speaking as part of what we used to call the humphrey hawkins bill. you can bet on the heels of what simon is talking about, the ltro, qe lite as some are calling it, he's going to be questioned about leqe-3 tomorro and some hint of whether that's way outside his thinking or a distinct possibility. >> we know what the next 30 days are like. there are some key deadlines in the next month. >> the big thing is, they're expecting a lot of val tillty for 29 is a lot sitting out there a few months. that's pretty higher. higher than it's been in a long

time. >> -- particularly with all the headlines coming out of europe, there's a finance ministers meeting on monday at which they have to sign off on the efforts that greece has made. that would appear to be 9 next pressure from europe. >> bring in steven, chief u.s. economist with misuto assureties. durable and case relatively negative. good things, claims, confidence, even richmond today. is there a net net here? >> the net net is the economy's actually doing a little bit better. last year we were probably running about 1.5% average growth rates. this year 2%, 2.25% average growth rates. that's an improvement, but not enough to really say you have an economy that's out of all risk profile. really what's happened is the risk a year ago shifted to the downside are now balanced and we've got an economy that's growing on a better trajectory. >> what is the biggest risk? what housing's been showing us lately in some of the case

numbers? investment stuff you point out in durables? >> if you look at the hard data, the hard data is becoming a little bit more mixed versus the expectation data. a year ago the expectation data was all strong. the hard data was all on the weaker side. now it's a little bit more mixed. i think one of the key industries to look at going forward is going to be the automobile industry. the automobile industry has been the rock solid improvement of manufacturing. that's been one of the driving forces for this economy. if we're going to start to see that manufacturing, in particular autos, have reached a peak in the year, then we're going to see we really don't have much upside potential at this late stage in a business cycle and probably we're locked into sub-2.5% growth for the business cycle. >> your expectation for revised q4 gdp? >> basically unchanged. >> and when it comes to the whole jobs versus gas price dynamic, right, the seesaw that people are trying to weigh, which wins? better jobs, higher gas? >> depends on what threshold you

cross. you cross $140 a barrel, you get up to $4 a barrel on average across the country you're going to have pain. it's going to have a negative economic impact there's no doubt about it. you'd have to get substantially above $140 on wti to begin to start subtracting growth down back below 1%. you'd probably have to get into the $170. those are the kind of threshold numbers. >> there's some cushion there but the trajectory is still a little worrisome >> correct. >> given what claims have done over the past six weeks, two months, you've got a number for jobs week after next? >> i think the job numbers are going to be about 225,000. you've got 175,000 underlying trend up from 125 last year. better weather adds about 25,000 to 50,000. so that's where you get to the 225,000-ish number. the question is whether or not there will be a payback in spring. because a lot of the jobs we're seeing are construction related jobs. >> fall forward. >> and you had that pullback in the spring, we're going to dip to lower growth numbers, and that's when you get into the ideas of when qe-3 will come

about. it's a second quarter issue. and whether or not that comes through in terms of monetary policy in the chairman's testimony the next few days -- >> you would expect him tomorrow to try to punt on almost every question when it comes to that? >> i think he has no alternative to do that at this stage. >> steven, thank you. a lot going on. >> there is. >> as we get into the spring. when we come back more on apple's next move. this ipad three coming up. straight ahead the latest round of corruption as well as news corp.'s british tabloids, bribery and hacking. what does that all mean for the media giant? that's coming up next. first a look at winners and losers from europe's trading day coming to a close. dow up 33 points and the s&p still holding that. 0 level.

coming up next on the "halftime report," a big call on real estate and his take on where the markets stand right now. apple at 700? the analyst and his lofty price target. and j.p.morgan meets the analysts. why have shares lagged its competitors? that's all next on the "halftime report." now back to carl on "squawk on the street." >> thank you very much for that. as we have been reporting, sources telling our jon fortt,

new york is the likely location for the new report. closing in on becoming a 500 billion market cap company. jon fortt joins us with more details on what we learned almost an hour ago. >> carl, here's what i've heard, and here's what's out there in general. what i heard that surprised me from the source is that new york is a key location for an upcoming apple launch. not exactly sure what that product is. of course, everybody's anticipating a new ipad. here's what's also out there as far as expectations for a new ipad. it could be announced as soon as next week. the usual location for an ipad announ announcement would be san francisco. that's where they've done the previous two announcements, also we're expecting an advanced apple chip, perhaps quad-core, we're expecting lte because apple has been waiting for key penetration for that technology to build it into devices. and we're expecting higher

resolution screens and cameras to be a key component of this device. so, lots of buzz about this over the past couple of weeks, as far as march 7th launch date, i haven't personally had that date confirmed. and i have heard about new york being a location for an upcoming announcement. that would be interesting from a media perspective, of course, because of all the media based out your way, carl. >> and we remember their event at the guggenheim here in manhattan when they took aim at the education mortgage giant. you're saying new york may be a location but not the location, correct? >> got to be very careful about how these things are phrased. lots of rumors coming in. then i heard this bit about new york for an upcoming product announcement. i don't want to conflate the two and tell you somebody told me this thing is going to be called ipad 3 and that it's going to be announced in new york. that's not the case. what i've heard is that new york is a key location for an upcoming product announcement. everybody is expecting a new ipod -- a new ipad next week.

we'll kind of see what happens. san francisco has been the traditional location for these announcements. >> possible television as an element of all this? >> well, you know, i haven't heard anything specifically about that. but you know, if you were going to do something big in television, some place other than san francisco would seem to make sense for that. but i don't have any information on a television coming that soon. >> okay, all right. and for those who are not well versed on technology, and there are a lot of us, john, unlike yourself, what is lte and why is that important? >> well lte stands for long-term evolution, and it's commonly referred to as 4g. it's faster, wireless, verizon was first out of the gate with that. in the u.s. it's a great technology, it drains your battery a lot faster. we saw that with 3g. it has a little trouble, the signal penetrating walls so people will have some frustrations getting that coverage indoors. but it's expected to be very key for the next generation of tablets and smartphones because it moves data so much faster. >> interesting.

well even as we watch the stock, jon, rich perioderson over at s&p points out if apple were its own industry in the s&p it would be larger than materials, utilities, and telecommunications services. as we all know it is a industry all unto itself. good work, jon, thanks so much. john fortt joining us from san jose. why? i thought jill was your soul mate. no, no it's her dad. the general's your soul mate? dude what? no, no, no. he's, he's on my back about providing for his little girl. hey don't worry. e-trade's got a totally new investing dashboard. everything is on one page, your investments, quotes, research... it's like the buffet last night. whatever helps you understand man. i'm watching you. oh yeah? well i'm watching you, watching him. [ male announcer ] try the new 360 investing dashboard at e-trade. that is better than today.

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testimony yesterday in london uncovering some wide ranging corruption at news corp. sun tabloid. our kayla tausche on that. >> it does. yesterday there was a debrief on operation. the deputy assistant police commissioner gave a very damning update. >> reveals a network of corrupted officials. there's also appears to have been a culture at the sum of illegal payments and systems have been created to facilitate those payments, whilst hiding the identity of the officials receiving the money. >> akers provided further details about what's taken place since police were notified last june that a former journalist at "news of the world" may have been paying sources. a number of arrests have followed since then.

ex-senior managers who authorized payments and one kurnt staffer who is allegedly paying police in cash. akers said some 80,000 pounds were paid to public officials with one journalist given the equivalent of $238,000 to pay his or her sources. but akers says the investigation is closer to the start than to the finish line with the police effort set to ramp up by at least 50%. now, news corp.'s own management and standards committee is expected to release a report on its own findings in april, i'm told, by people familiar with the matter there. the stock, though, for news corp. has been held by a $5 billion buyback program which depends on what -- what's happened when it expires in july could re-ignite the debate over whether the bleeding uk newspaper arm at the media giant should be severed. let's take a look at rebekah brooks, too. the former news international chief. she's due back on bail in march according to two people familiar with the matter. she was arrested in july and released on bail after nine hours of questioning. testimony yesterday also alleged that she was aware of the reach of these practices.

carl? >> kayla, stay right there. bring in sarah ellison into the contribution. contributing editor at "vanity fair." author of "war at the "wall street journal"." always good to see you. good morning. >> thanks. good morning. >> your reelections on this latest iteration of this scandal? it's come out in dribs and drabs over the past few months. is there anything about this chapter that you think is a game changer? >> well, i think that the testimony yesterday was particularly damaging because it had to do not with phone hacking but it had to do with corruption, corrupt officials, payments to officials. this is -- this is bribery, and this is what gets people thinking about the foreign corrupt practices act in the u.s. and of course, the fbi is looking in to that. in the states i've talked to, a couple of executives in new york who have been visited by the fbi, asking them about their work at news corporation. i think the big question is, we clearly, to my mind, it doesn't seem like there's any way, regardless of what murdoch says and what he wants, they're going

to be able to hold onto these papers at the end of the day. the question now is, does it spread any further than that. is it something they could really localize in britain? and come what may, however bad this gets in the uk, is it going to be something that spreads beyond that? >> kayla? >> you know, i think that that's going to increasingly be the question. and sarah, you know this very well, but you know, it's more of an egocentric funnel of assets than one that generates a good bit of revenue for news international. the question is whether, you know, whether any of the executive roles would need to be split, whether those assets can stay in-house. that's really going to be the question, of course you know we have some of these reports coming out and obviously the buyback expires in july. what they actually do strate strategywise will probably happen sometime around then. >> sarah, at the same time, this tweet from murdoch posted yesterday bragging about the son in his words, amazing, the sun confirmed sale of 3.2 million copies yesterday.

thanks all readers and advertisers, and the best part, of course, sorry if sold out, more next time. is it possible for murdoch to both brag about the newspaper business, and also face the scandal that he's got in his hands? >> well, i think that, you know, one of the things he also said after the testimony that kayla was talking about, was that that sun doesn't exist anymore. we have a completely new "sun" now. we have instituted all of these changes, it's a different organization. of course, it's a gamble to say that because if something else comes out now, then -- then you really can't believe that the organization could ever get clean. and i think that's a real question. but on the business side, there's a huge division within news international right now. in europe, and in the uk in particular. and it's the management -- their own internal management standards committee is working to sort of uncover the bad things that have gone on, and then it's the people who have to still work there, who feel like they are being investigated by

their own company, which they are. we create a huge amount of tension. what murdoch did is come in, launch "the sun" on sunday which was a very easy business decision. it was hardly any extra cost, and they had all the capacity to do it, and to use that as a real way to buck up the staff and to get things to what he loves to do, to launch a newspaper. there was a picture of him posing with the "sun" on sunday next to the original launch of the "sun" back you, you know, 40 years ago or 30 years ago. so he's sort of living his dream of a newspaper baron so it's possible for a little while for that juxtaposition to exist. but i think what he's really banking on is that the place is now cleaned up, and certainly that's what he is saying. so i think that that's -- that's the question. >> yeah. one current lady of london and one former lady of london. sarah ellison and kayla tausche. guys, throughout. when we come back, keep those tweets coming. a german waiter losing his balance. did you see this?

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squawk on the tweet on this tuesday. i don't know if you've seen this video, this german waiter losing his balance, dumping five beers over angela merkel's back. so we're asking you to tweet us. how would you caps the video? merkel says good thing that was a bud. hate to waste good sherman beer. marco tweets this one is on you mercky. and daniel tweets the german middle class contributing liquidity to the eurozone sovereign crisis. obviously she recovered enough in time to enjoy a toast with some of her colleagues. that was at a meeting of her christian democratic party. a few stats and facts on this significant market run. the dow and the s&p on track for their best february since 1998. i don't know if you know this but february is traditionally the worst month of the first half of the year for the s&p. nasdaq having its best february since the year