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tv   Squawk on the Street  CNBC  March 12, 2012 9:00am-12:00pm EDT

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>> stock's 18, 19. i like it. >> what is the private market value? >> pay $19 for a stock, $8 in cash. paying $11. if i were running the company i would tell my customers, hey, i'm not producing any more cars, i'm going to raise the price. short runs, you want to buy wheels from the chinese, good luck. >> thanks, mario. thanks for coming in. great see you. >> always a pleasure, privilege. >> join us tomorrow. "squawk on the street" is next. ♪ good monday morning. welcome to "squawk on the street." i'm carl quint nell la. melissa lee is off today. futures on unsteady ground to start the week after china hosted the worst monthly trade deficit in 12 years, raising concerns about a slowdown in the world's number two economy. that's one reason futures are a little soft here. europe also looking at mixed signals this morning. our road map for today. big week ahead.
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most of it focused on the united states. fed meeting tomorrow, banks stress test results, inflation data. will the markets forget europe and focus on the home front? apple says preorders for the new ipad delayed two to three weeks even though it will still be available in stores on friday. good news or bad news for the stock at a new record high today. disney looking at potential disaster in "john carter," new box office bomb. generaling ups the stock to a buy for different reasons. can the stock stay afloat? pepsi grooms two potential successors to ingenuity. what does that mean for a company whose execution has been called into question lately? as we said, busy week ahead for the federal reserve. central bank kicking off the federal open market committee tomorrow. fed also expected to release test results on several u.s. banks. the ft says once those tests have been conducted the fed will pave the way for a doubling of bank dividends and share buybacks and even citi may be a
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nominal one-cent dividend. >> i know at citi we have the pay figures. i'm sure there are people outraged at citi. the layoffs have been horrendous there. guy making multiple -- eight figures and i think that when you see that, you get a little angry. at the same time, jp morgan, i don't even know if we have a chart of jp morgan. citi is breaking out, some people say it's not so hot but i think that's the most recent. jp morgan has just begin to run. i think jp morgan is going to be a chance right there. i think jp morgan has a chance to break out because that's the one i think -- >> prior to the crisis, i believe they were paying out as much as 70% in dividends. dividends would seem to be in this market particularly where people are hunt for a yield, use a phrase we've use sod many times. one would anticipate if you can move the dividend up, even not back to good old-fashioned core earnings, still going to be able to support it. >> this would be an amazing switch, if we had banks as leadership.
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>> yeah. >> i read through all the stories of stress test. when you compare our banks with other banks, chinese banks, with the united states bank, with latin american banks, with european banks, our banks are like in fort knox. i mean, really done something right here. >> yep. and those stress tests, of course, that they're going through a very onerous. it's unclear though whether carl they're going to send a concern to at least a certain extent they may send a bad message because they're stressing them so much, you know, that you don't want people to get scared in anyway. worse case, worst case scenario. >> the argument has been if you can get financials to participate in earnings power the way other sectors have, then maybe the rally that we've seen so far this year has some legs. >> i'm buying that. and here's why. you've got a gigantic portion of the s&p. it's just overwhelming. and if we can get leadership thereafter having leadership in the industrials, having leadership in tech, seems to be
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cooling rights now, this morning we have a very tepid series of pieces about the food stocks from goldman sachs, you know, it turns out this is a rather remarkable thing. this banks are the most cyclical stocks out there. more than caterpillar or rockwell. this group can lead us only because it is so far behind it is frightening. >> let's not forget there are plenty of headwinds. we have an economy that is s growing. organic loan growth at least from jamie dimon who has spoken about this a number of times. but still got dodd frank, mortgage issues. we could sit here the rest of the show and tell you all of the things that are still -- they are facing in terms of the bank. >> china numbers, trade deficit, six times worse than the estimate. $31 billion. worrisome in light of what we heard out of india and lowering reserve requirements.
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>> i wanted a cut last night, carl. i wanted a surprise chinese cut. we had a brazilian cut. second one last week. i think people have to recognize, i think europe is not buying stuff from china. you have the yin and yang here, you are not seeing them export as much. i think that china remains what's necessary to get growth in europe. boy, do we have any growth in europe. austerity stories don't read so well. >> no growth in europe. >> none. >> we've got a lack of growth or negative growth. >> that's negative yard. it's shrinkage. >> that's negative yardage. how do you have negative yardage? >> going backwards. brand new shake-ups. see you later. no free lunch for that guy. >> seven years, 29. old man for a running back but not for a financial commentator. he could be it. >> look. i think the set-up here is a tepid set-up. i think a lot of people are worried about the trade in sports.
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i think there are a lot of people who feel that the misses by tech last week could be the beginning. >> t.i., that kind of thing. >> yes, the t.i. i think it's a mixed picture. but you were so right. we're going to be focussed on the u.s. and we need to see some things that raise numbers for stocks like disney. >> right. >> which we're going to talk about in a minute. >> yes. >> in other words, you know, big cap, dow stocks. >> we head into a fed meeting, though, carl, and these are the questions that the fed is going to look at. questions about will as twists comes to a conclusion, will there be another version of it, can you go out there and buy more mortgage backed securities or have we gone far enough? that's going to be a feature of the week. coming up, we'll talk about black swans and look at a few negative indicators. on the list, what more hiring means for the next round of qe. we will talk tobt journal's john who wrote that high end piece and see where john stands this morning. movingapple, the latest version of ipad to hit stores on monday.
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the new e pads that are preordered online will not ship to buyers until the following monday, march 19th. company previously said the tablet would arrive on the launch date at a spokeswoman explanks the change was made because customer response to the new ipad has been, in her words, jim, off the charts. >> look, every piece i read this weekend about the ipad said the same thing, which is that this is not evolutionary. this is revolutionary. you've got to get in. you've got to buy one. people are clamoring for it. corporations are clamoring for it. i come back and say what do you do if you're hewlett-packard, what do you do if you read those arms? what's your game plan? >> not to compete in that area. >> no, you can't. >> i mean, if you're meg, you've got plenty of things to think about beyond trying to compete with the ipad, which you're not going to. >> is she filling in her brackets today? is t that the kind of thing you do, hunker down? sarah palin, game change, worried about theal lance can
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poll numbers? >> funny. tell you what, let's not compare meg to sarah palin. >> it's interesting. >> julianne moore. >> she can play that role, julianne moore. >> i didn't see it. >> i watched "game change." jim went to the premier. >> wow. >> great picture. really interesting stuff. >> where were we? >> oh, yeah, apple. >> on a marketing question, i'm curious. they chose not to name it ipad 3. >> right. >> does that matter at all? do you think by doing it and it's now just ipad for the foreseeable future even though there will be upgrades, don't i want the newest version? >> i question that we ever question apple. until they really stumble, i'm giving them the benefit of the doubt. there's a couple of guys out there i want to give the benefit of the doubt. >> do we think that was a jobs' decision or cook decision? >> tough one. also comes on a day when there's a big story about apple's market share in china, single digits versus samsung 24, 25, because of their single carrier
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strategy. >> right. wrong distributor. i heard that in europe, i had wrik hill, the ceo of novellis,since merged, he was saying the samsung is quite power phil in asia. people really think the samsung has got much more gravitas than the iphone. i don't know. i love my iphone so much. we're all biased. i think everybody who tries an apple product is just biased in favor of apple because it's so blow away. >> someone who has already preordered the ipad, it's hard to judge the product without a color view because we use the products in our everyday lives. let's do disney. disappointing box office debut for "john carter." cost more than a quarter billion dollars to make generated only $30 billion, came in second to "lorax" which brought in $39 million for universal. despite the weak start, jenny upgrading disney to buy from
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neutral. strengthen the company's sports programming and amusement park businesses they say helps minimize the threat from internet television distributors. may be one reason why the stock is not suffering from the bad halo effect for "john carter." >> i have a halo over me and i love that. >> gecko emblem. >> you know, i mean, we're long passed the day where one movie can make or break a company in the '60s and '70s. when you had a lot of public movie companies, you could go to a premier and potentially go short or long and actually see impact. >> why is oh we. >> lyons gate is going to be like that when we have "hunger games." was this a favorite, david, to make this movie? >> why? >> to stand. >> pixar directed "wally" and n "nemo" and they compared it to "isht "ishtar."
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>> good old "ishtar." it always comes back to that. number one greatest failure, right? >> yeah. >> "to heaven's gate" is up there. >> but here we're talking disney, the cable networks, parks, and then we come to the movie studio. we will see whether there is significant impact today from what is going to be a significant flop. >> remember -- that's her point. the point is that espn, parks, means less reliance on movies, unlike a time warner which they actually take the opposite view. >> i think it's important to point out that bob iger to some degree deemphasized movies that he doesn't want to make as many. at the same time, they better all be hits if you do that. one of the things that is great about universal and parent company's network, anything that makes a hit movie can then, a hit ride, or hit merchandise is terrific. espn is bed rock.
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espn is one of those, if you don't take it, that's still the leasti i tivo'd and the least time shifted. we all like the hosts of espn and we like it. i'm joking around about jack carter but at the same time you have a lot of good at disneys. four times earnings. >> we will talk about this. and the headlines will not be good for the company when you look at how much money they sunk into the movie. >> as the time points out the comps may not be too bad because a year ago was "mars needs moms" which was a big disappointed for disney. >> i missed that one, too. >> i have to ask you. when you saw the trailers of "jack carter," did you have any desire to see that? it was like, you know, schwarzenegger meets like fire-breathing space machine. >> you are not the audience, my friend, at all. they're not focused on you. not even him. >> you're more of "the
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descendents," "cocoon". >> come on. "on golden pond," oh, geez. sun rise senior living, what are we showing this weekend? meanwhile, pepsico has named former sam's club president brian cornell. john compton has been named president of pepsico. cornell was at walmart. approached by the skrrks eo opening at avon products but the broader framework, is the board getting someone in line to replace her is she leaves? >> i think that there's a move whenever you -- off the desk which says that she's in trouble. when you actually like make calls she's not in trouble. so i really want to try to drill down over the idea that maybe she's doing quarterly succession work. i know this is a very contrary view. i know people who are buying pepsi say she's out. i am not get that call. >> i'm not get that call, either. >> i'm not getting the break-up
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call. >> listen, until you and unless you talk to board members and even then when you do sometimes in the these situations they don't tell you what they're really thinking. it's unclear whether there was any pressure whatsoever to brought to bear to increase management ranks. but the speculation will continue as long as the stocks is not making people happy. >> it's not like the consumer product stuff. >> strategy in terms of lost market share to business. >> it's not like general mills, general mills, goldman sachs downgrades today. no one is talking about ken powell being in trouble. >> right. >> and that stock has been stuck for a while. i know ken's total return has been pretty good and i like what he's done with general mills. but it's not like we're sitting here saying this group is on fire and pepsi hasn't done anything. >> what do we know about cornell at walmart, much? >> not a name i'm floor with but it's been a little while since i focus and that company. last stock is a couple of years old at this point. >> when you shop at walmart, what's your feel? >> no walmarts nearby my home
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otherwise i would be in there all the time. >> neiman-marcuses, as far as the eye can see. >> by the way, to my defense, this is a man who has never seen the store, hasn't gone in. i have seen a store and i have gone in. i hate shopping. hate it, hate it, hate it. >> most men do. >> yeah. >> i was on trying to get a combination vcr/dvd for my dad. walmart didn't have it. but if the people who didn't have it of the 30 stores that didn't have it, they were the most polite. >> really? >> yes. their terrific. >> good to know. >> you are a keen judge of customer service. finally, i assume you're going to fill one of these out. >> absolutely. >> giving you have hard sometime about harvard this morning. harva harvard/vanderbilt? >> i may have to go with vandy there. the "wall street journal" does it now. very interesting. everybody does this. i'm in about half a dozen of these games. the amount of darren rovell often does the amount of lost work hours because of this. the country shuts down.
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cbs does quite well. >> cbs, $30.31 right now. they're exploiting it on all platforms. online, it's done a lot to help that part of business, too. >> cbs has these programs, you know, you seal them on. they go into syndication and you watch them over and over again. it's really incredible. there's one called "criminal porn" which is actually called "criminal minds." you know, how many times have i watched the episode of the guy who only stabs people in the eye. wow, i got to watch that one again. >> if you read the column recently in the "new york times" when you watch these guys on the court you have to wonder why they aren't being paid. >> i know. >> that's one of the great mysteries, is that having had a daughter who was recruited as an athlete, and realizing that if you go that way, you literally are going to do nothing but be an athlete. i think they should get full credit, if not for up money. >> i think public opinion is starting to move that way. it will be interesting to see. >> also, if you don't finish
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school, right, because you're a great athlete, andrew luck finished school, but i think these guys should drop out of school because the money is too great. >> and time is short. >> absolutely. when we come back this morning, the chip sectors a a canary in a coal mine, the orders are down, will the stocks follow suit? a lot more "squawk on the street" live at the nysc when we return.
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♪ some soft of the stories we're squawking about. gasoline prices keep rising. jumping 12 cents during the last two weeks. $3.81 a gallon for regular. >> i paid it. >> yep. lundberg survey suggests the increases are slowing. national highway traffic safety administration opened a preliminary investigation into an estimated 360,000 ford taurus sedans. the model years '05-'06, the probe involves a potential problem with the throttle getting stuck in an open position. volkswagen reporting an annual profit of $20 billion for 2011, the most ever. the german automaker adding technology to development cost may limit the profits for 2012. tweet time on this monday. "john carter" was billed by
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disney executives as indiana joans meets mars. it's more like "ishtar" meets kazakhstan. >> we're hopeful for that movie. we have a lot invested in it. and we've got to understand the great creator, great director who has done some great work for us at pixar. we believe in him and we believe in the movie he's made. >> captain john carter, virginia. >> virginia. virginia. >> okay. brings us to our twitter question for the morning. we want to know how disney would have been better off spending that $250 million. you can tweet us. our twitter handle is@cnbc. it's a lot of money. to be fair, they did make, i
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think, 70 overseas so the at trabtive to get our money back. >> a lot of movies are now made for the overseas market as much as domestically. if you watched the clip from "star wars," by the way, it would have looked just as silly. you can't judge based on 20 seconds. >> right. >> long but don't prosper. look. we're giving iger a hard time. disney is a stock i have liked on "mad money" for the duration because these are brands that don't go away. the theme park is packed even though gasoline is high. espn is probably the greatest franchise in the history of tv. and so they had a bad movie. mean, they had a bad movie, all right? >> it happens. >> it does happen. >> i see a lot of bad move virs. >> really? >> but then again, when i'm dialing around on the tps or tnt i stop and watch "the fugitive" every time and stop to watch "godfather." good business, that business. >> yeah. >> "criminal minds." "mentalist." i don't know. >> "mentalist," what a name.
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>> it does well. >> simon baker is more of a plays to the women, the female, that's just me. just one theory. when we come back, how to turn this monday into a money maker. as we go to break, a look at futures, slightly positive on this monday after a lot of news over the weekend. be right back.
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♪ this is how we're about to do it as cramer's mad dash kicks off a monday morning. looking at homebuilders today.
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>> barclays has a big call today, carl. i think there's a lot of people on the sidelines waiting to see whether house is -- a house is like a car right now. the moment you take it off the lot, it's worst less. this call -- >> not worthless, worthless. >> yeah. >> good. >> this call, kb holmes has been a beleaguered play and pulte homes. this has been a hot group. now you're starting to get almost everybody saying, look, this is the group to be in. you've got to be in bank stocks. they own homes. i'm not a fan of bank of america but they have a gigantic portfolio of homes. maybe that is is the way to play it if you really believe in the homes coming back. i'm more skeptic. >> we're going to do more after the break because we're going to ask why if you can't get product into the consumers' hands when you promise why the stock is up. >> every other company would be four wrourious furious. get ready for another big day of trading. .
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> . [ bell ringing ] >> with that we kick off a monday morning. and mid week of trading, the opening bell, s&p on the top side of your screen. at the big board, bloomberg trade order management solutions. at the nasdaq, jim, girl scouts of the usa celebrating the organization's 100th anniversary. >> is it time for cookies again? >> have you not -- i've already put on the five pounds that comes with having samoas in the house. >> i am a mint guy. i put them right in the freezer. i always buy them. they hit you right outside the supermarket. great pleasure. my eldest daughter ran it for a while. it's just fabulous. >> very nice. fantastic organization. we'll see whether investors feel apple is a fantastic organization despite the delay of these preordered new ipads. it's going to take a couple of weeks to get them in your hands. >> i just think if this was hewlett-packard we would say,
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it's so disorganized. it's apple and we think, what demand, it must be overwhelming them. anybody that has been that right you tend to think that this is just real demand and they're just overwhelmed and they're not ready because so many people want them. >> you tweeted this morning very early about soda. at a party last night -- >> i had a party last night and i said to the kids, would you like some soda and i realized my soda stream was broken. what my friend, well, couple of my friends without mentioning them said, mine's broken to, mine's broken to. i said, listen, we've got to find out if everybody's was broken. rather over whechling thing. some say it's working. i question a product where three different families are together and all of their soda stream machines are broken. >> yeah. >> and no one is taking them back and fixing them. >> i think henry tweeted the same thing about his. second one. something to keep aen eye on. let's take a look at the nasdaq. big story in "the journal" today, close to back to 3,000, above those levels.
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it's different than it was in '99. >> right. >> back then nine paid a dividend on the nasdaq 100. today 43. back then, almost 200 had dotcom in the name. today only 1. do you see big differences? >> you have google. one of the things you have, carl, is earnings. we forget, pay a dividend because you've got great earnings. intel pays a good dividend. i thought thought of that as a dividend play. microsoft, good dividend. this is a sign of health. a lot of semiconductor pace good dividend. i think sanguine about the nasdaq. i think it's real. offers yield, too, and great value. >> i see oracle downgrade at jeffries. >> i think that oracle is a troubled company. s&p and acensure when it comes to consulting. i i question their hardware side. this is mark hurd and larry ellison. i think chm is just schooling
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them. i think it's schooling them. and i think that people have to watch that stock because the last quarter was bad yet the stock has come all of the way back to 30. agree, time of get out oracle. >> fierce rivalry between those two companies. >> yes. >> southwest and united. >> oh, my. you know, gasoline, jet fuel is so high. i thought this made sense, this bank of america downgrade. i don't know why people are still in these stocks. what does it take? don't they realize the costs are up so much and you can't really hedge it in a certain point. i really don't like the airlines at all. >> i see harley, citi group saying some good things. >> yes. we did a piece recently about harley and the momentum, the sales momentum and how is if kind of thing that frankly, do you really need a harley? no. this is discretion spending back. >> discretionary that you need to finance in a large case. >> yes. i think a lot of people used to think this is a market where
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harley is going to have trouble -- people are going to have trouble financing. i would tell you that there's a secondary market use harleys that now there's a lot of financing for and that's helped the cost, too. i don't have one, carl. i don't know if you have one. >> never -- i don't know how to drive a motorcycle yet. one day, though, maybe in retirement, yeah. it will be time. >> ridden on one. i've got to tell you i think this is the great american brand that we've taken back and i really believe that when you look at what we do right, we make motorcycles happen. >> do you drive? >> my friend michael haley has one and it's a great joy to be behind him. i do feel that they're great. >> i have a mental image of you dressed from head to toe in harley leather. yes? >> i've done that. aware a scarf on my head and i have at thes all of the way. we'll don't understand my tat situation. if i were to roll up my sleeves right now, carl, you would be blown away. >> with that in mind, let's hand it over to bob and david on the floor. guys? >> thanks, carl.
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we're here, we're talking china, of course, trade deficit larger than had been anticipated. a lot of interesting -- interesting things happening in that enormous country. >> the big discussion we had this on friday, how soft the china's landing going to be? most people feel it's not going to be hard landing. they reduced their numbers to 7 1/2% gdp growth. most people feel consistently. none the less, we saw deficits today, trade deficits, china traditionally has run a huge trade surplus the first couple of months of the year. running a deficit. why? there's a couple of things going on. number one, europe is much weaker. one of the biggest trading partners. the u.s., exports, we're still growing but the u.s. exports are not nearly as strong as they used to be. so the reason all of this is -- >> exports for china, too. >> the reason why this is important is china's exports are a huge part of their gdp. about 40%. now, that's way, way larger than the percentage of the exports
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contributed to our gdp. that's why this is a big issue. >> economy and they're not. >> right. >> that's right. >> they're trying -- but they are trying to have more consumption within the country itself. >> that's right. and that's a good thing. because china is changing. the population is getting wealthier, so their tastes for more expensive foreign goods, hopefully western goods, sin creasing. this is or the of part of a natural evolution. auto imports are up dramatically in the first two months of the year even though auto sales might be slowing. auto imports are still growing. also, the more competitive lower cost places emerging now for china, losing business. some people don't know this, the average wage in vietnam is 33 cents an hour. 33 cents. that's somewhere on the order -- do the math. that's about $50 a month, assuming 40 hours a week. >> yep. >> china's twice that. china average worker is somewhere on the order of $100 a month. >> and going up at a rate of almost 20% a year.
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>> that's right. >> which is one reason why anecdotally, i've shared this on the air, i talked to a few ceos, nothing major but they are moving some manufacturing back to the united states in various areas because it makes sense given the labor -- >> we'll watch nike. remember, over to new mexico and then over to china, then to vietnam and eventually maybe back to africa, who knows where next, but let's hope they will eventually be back in the united states. i just want to mention eurozone finance minister in brussels today. the obvious discussion is to authorize the $130 billion greek bailout. they're going to vote on that. i can assure you can real topic is the recession in europe because we got the confirmation today about the recession in europe. italy is officially in recession now. their gdp dropped 0.7% in the second quarter. this is not a huge surprise. but at least it's a confirmation. it was down about -- i think it was 0.2% in q-3. mario will be talking to merkel as well. i think you're going the find
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that stimulating growth is going to now be the very hot topic. you will hear less about austerity and more about how they can sort of advance growth in italy. >> how? >> one big thing, article 17 of the italian constitution, that's the one that basically gives you employment for life, that's one of the things that has to be changed. they're going to focus on that in the coming weeks. i think you're going to hear a lot more about how to stimulate growth over there. by the way, we're going to have the gold special tonight, 9:00 p.m. eastern time. we're going to take a look over here. big burlily guards are coming in with gold bars. they're unlocking them. they're going to be standing next to them the whole time, these gentlemen here, with the gold bars. we're going to show you what a london good delivery bar looks like in just at an hour. they're unlocking it right now. these guys are standing next to us and won't be leaving us. 10:45 eastern time we'll unlock it and show you what the gold barps look like. that's part of our special tonight. >> back to you, carl. >> thank you. you guys are talking gold, it's just at 100 -- 1700, jim.
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>> people feel gold correlates with it. greece seems calm so sell off gold. i want to point out that gold is supply and demand situation, the that the mainers have had a tremendous time finding it. trades at 1700 and doesn't bring out tons of gold. it's ban opposite. when you say gold corp., they're so challenged to find gold. don't write off gold because the supply side is really bad. really bad. they can't find it, carl. >> we're going to get a lot of data this week. among them, numbers, retail sales tomorrow and i know you're watching a couple. >> jp morgan says macy's is good. macy's has been the barometer. it's a multi-year pathway. carl, i got to tell you that's been a fantastic stock. maybe it continues. 52-week high. >> unbelievable. >> going to keep an eye on thanchts let's check out the latest moves in energy and metals. sharon epperson is at the nymex. >> a lot of hedge funds are cutting their bullish bets on
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commodities. that couple with what you were just talking about in terms of in news out of china is definitely weighing on wti oil futures. looking at brent crude down as well this morning. keep in mind though we saw, in fact, the cftc's commitment traders report so i that forthfirst time in five weeks we saw money managers cutting it. not so though in brent crude and definitely not so in gasoline. gasoline futures and options, money managers increase their oil positions yet again. we're at record level there's. one of the factors helping that 24% increase so far this year. and gasoline futures prices and prices at the pump at $3.80 a gallon. up 30 cents in the past month. keep in mind though we have seen some cutting of positions in terms of the gold market. in fact, the most net longs have been cut since august. and that is according to the latest cftc report. that is another factor perhaps weighing on gold. but we're seeing questions across the board lower in this session. david, back to you.
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>> all right. thanks very much, sharon epperson. look at that. time for a little faber report here. seeing activism and interesting name. solely. not a large company by any measure whatsoever. i know that. but what is interesting here is that it is a challenge to kkr, a company that once controlled sealy, private equity company, asset manager, alternative asset manager if you want to call it that. it is being challenged by 14 1/2% holder, h partners, saying you have done a lot of things that have not helped this company, overloaded it with debt, repeatedly made poor ceo selections and you also got about $21 million in payments, that is the board of sealy, you paid $21 million to kkr since the company went public again back in 2006. and so it is an interesting challenge to kkr. one worth mentioning because not often seen in terms of activists investors going after the private equity sponsor which, by the way, no longer as you saw
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controls the company, although more or less does at 46.2%. they go on to say in a letter to sealy's board, quote, we are alarmd by the fact that the compensation committee changed certain director and officer compensation arrangements in fiscal 2009 to be aligned with kkr's interests rather than shrds. sealy states, as a result of the '09 refinancing the compensation committee believed that it was important to realign interest of management not only to those who current shareholders but also those of convertible noteholders. interesting fight, again, not a large company by any measure. you can see what's happening to the stock price, of course, but worth noting, at fight with kkr. on the m and a front, all medical shares are up sharply. japanese buyer there. $93 a their cash. some wondering is there a possibility of another bid. the japanese are usually thought of very strong buyers. meaning they will follow through. it is a tender at this point.
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they signed it late in january so some question and, frankly, i haven't been able to make calls as to whether there was an option. seems doubtful given how little time went by but at the same time, there's a handful of other potential buyers. not hard to make phone calls. >> worrisome that it was at its high ahead of this. do people have that, do you think someone had that if there was this initial talk? i see this stock running. i always feel like someone had the call. >> i don't know if anybody had the call itself. but as a seller, you you do usually want to meet your all-time high or 52-week high. when you see those that aren't, questionable. >> medical device area, hot? i don't believe so. nothing is hot. >> these guys make investments, been on before. you wear it while you're in the process of getting a device implanted. >> may we never know. may we never use zoll. >> what's interesting of course is it's another monday without a lot of deals. >> whatever happened to merchant monday? remember you come in and it was
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jaw-dropping. >> we've got this. i may mention later a canadian company that appears to be in play, fairly large. very few and far between. we haven't seen a lot of lbos, either. interesting to note because they have so much cash at the lbo firms. interest rates have never been lower. the job market has never been more generous. and one does wonder whether we're going to at least start to see momentum as we end the first quarter here without, as you see, with increasing. comparatively, it just really shocking in terms of both lbo numbers and overall m and a numbers, both strategic as well, noting in we should have thought. pointing to a big second half which, to which i say, all right, we'll see. we'll see. >> i think they've unlocked the box. back with pisani. bob, dig documentary airing tonight on gold, and you got it first hand. >> we promised and here it is. this is what's called a london good delivery bar. it's about 400 ounces.
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precise weight on it. it's about 400 ounces. that's about 25 pounds. current dollar value? about $700,000 per bar. together here we got of two of them. about $1.4 bhl million in gold. the important thing here, this is the international standard for gold. cold 1a london good delivery ba. it's not the manufacturer, it's got a serial number. this identifies the bar and, of course, indicates the purity and the value of it. and that's the important thing. you've got to have some kind of international standard. we're going to show where this gold came from, showing the largest refinery in the world and, of course, the largest private gold vaut in the world. that's 9:00 p.m. eastern time tonight here on cnbc. don't miss it. >> can't wait foir it, bob. when we come back, disney dropping $250 million to make "john carter" getting a tepid return at the box office. >> stock up. stock up. >> what would have been a better way for disney to spend that money and why?
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tweet us. your answer is straight straight ahead as we get to break this morning's early movers on a monday.
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time for squawk on the tweet. "john carter," generated only $30 million in its first weekend. we're looking into the bar of gold because we're going to talk about that in a second. this morning we're asking you, instead of "john carter" disney should have invested a quarter bill in blank because of blank. will writes, an apple stock because they don't have to make products to make money anymore. star tours at disneyland because john carter was advertised before "star wars" which isn't smart for this generation of people. john tweets, buying duns caps for the entire cinema crew because the end result would be the same. brian writes, disney should have invested a quarter million in "phineas and ferb" because it's
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popular with kids. >> i love it. >> do you know that game? 12k3w4r are you kidding me? that's my sunday and saturday morning viewing with my kids. it's great. >> i'm dated. that's beyond me. >> the platypus? >> yeah. we haven't graduated to phineas. >> fabulous show. >> you're holding up $700,000 worth of gold. >> there you go. >> wow. >> $700,000. >> it's making me sweat. it feels heavier. >> it's not filled with chocolate. >> no. this is really heavy. i would like to eat it, though. it looks almost el dibl. >> you eat it and you can reconfigure it basically. >> i'm going to start to sweat soon. >> i'm engaging how much it weighs. >> it's a pilates exercise. pilates should come with a gold brick. >> don't drop it, dude. don't drop it. >> now you know why they tried to throw throw it.
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>> there's no way he could have thrown this. no way. >> john connery can do whatever he wants. >> yeah. >> right? >> all right. still allot more "squawk on the street" still ahead. coming up, we can't get enough of cramer and he can't get enough of stocks which makes his next task so much fun. six stocks in 60 seconds. we'll be right back.
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time nor six in 60. six stocks in 60 seconds with the one and only jim cramer. first off, regeneron. >> this is the an dote to the previous drug. you put it in your eye with a needle and this time you have to put it in your eye less than the other guy. i don't think i want a needle in my eye that often either. >> wyndham. >> people like this. and two wyns. win ha wyndh wyndham, amazing story. time share, hotels ushs wow. >> microsoft, citi likes it? >> don't give up on windows 8. i use it, i like it. it's not the john carter of software. >> netflix last week, the talk
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was the cable deal. >> they put out cable? not a single cable company has come close to thinking they should do a deal. why? because of willie hammer? >> home away, underperform? >> internet backlash. carl, people are saying you got to get out of these stocks. i use homeaway, i like the product very much. >> green mountain coffee. >> unbelievable, friday night surprise. i'm going a little bit longer here because i got 60 in 180. starbucks, remember, it turns out they did ambush green mountain. a release came out where they said they didn't know anything that starbucks was going to go against them. green mountain still a sell. we've got to go back to disney for a second. we made a lot of jokes about it but the stock is up. that's the bathroom meter of the unimportant or the idea that this movie has been tested overseas and it turns out that the people in asia love it, which is now the way you make these broad movies. people make cable, these really great cable shows, carl, because they're american. right? they don't have to send them
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over seas. >> sure. >> a lot of people -- i've not been watching "walking dead," i'm saving it to bing watch it with my kids. we have a lot of great series made in america and not open over seas and then we make these blockbuster movies and they surprise us by having big sales in other parts of the world. >> you think that's one reason why the stock is up? >> the saying don't worry about it. this isn't juggernaut. every time you start pounding disney they blow away the numbers. last quarter is supposed not be that good. how about a stock that moved up three bucks since they reported? >> you're going to stick around during the 10:00 this morning. >> yes. >> what's coming up on "mad money"? >> every time you see this spill, this is the company that comes up and cleans up the spills. keystone pipeline, controversial because people worry about spills. this company is the spill company. >> all right. that's tonight 6:00 and 11:00.
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but you're not going anywhere. >> no, because my friend kelly is here. electricity is about to happen. >> we'll talk to kevin about fed in a minute. in the meantime, still to come, but where the swan dive? coming up, is the black swan trying to overtake the white swan economy? what signs should we be looking for? we've got someone joining us to help make sense of the whole thing. ♪ cnbc's kelly evans makes her way to post nine when "squawk on the street" returns. ♪ [ male announcer ] the 2012 m-class continually monitors blind spots, scans the road to reveal potential threats, even helps awaken its driver if he begins to doze.
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so in the blink of an eye it will have performed more active safety measures than most cars will in a lifetime. introducing the all-new 2012 m-class. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology, you know that the things that you do in your life, matter. if i did have an opportunity to meet a cancer survivor, i'm sure i could take something positive away from that. [ jocelyn ] my name is jocelyn, and i'm a cancer survivor. [ mimi ] i had cancer. i have no evidence of disease now. [ erica ] i would love to meet the people that made the machines. i had such an amazing group of doctors and nurses, it would just make such a complete picture of why i'm sitting here today. ♪ [ herb ] from the moment we walked in the front door,
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just to see me -- not as a cancer patient, but as a person that had been helped by their work. i was just blown away. life's been good to me. i feel like one of the luckiest guys in the world. ♪ ♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪
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only hertz gives you a carfirmation. hey, this is challenger. i'll be waiting for you in stall 5. it confirms your reservation and the location your car is in, the moment you land. it's just another way you'll be traveling at the speed of hertz. welcome back welcome back into the road map for the next hour. all week long we're talking black swans amid the rally. today we're kicking it off with the idea of easy money on the back of strengthening economy. strong unemployment numbers, the nail in the coffin for qe-3, john of "the journal" here and
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kelly evans to help us weigh the odds. greek is the first developed nation to default in 60 years. is greece out of the woods and what does the debt deal mean for the euro? and showtime for the banks. will the feds find renewed strength amid the industry? we've got the trade on the big banks in just few. aaa reporting the national average price for a gallon of gasoline rose $3.80 earlier today. i love aaa. i just got my new card. it's a good thing. this being the third straight advance with prices gaining $3.04 a gallon over friday and saturday. i found myself at the pump this weekend, once again, having the 70 and it's rally 90. >> by the way, l.a., it's not $3.81, it's $4.35, most expensive market in the country. $4.35. >> amazing. >> i was in italy last week and you can't even compare the prices there. >> that's because it's in
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europe, david. >> yes. well, thank you for that. and it's leaders but still amounts to what's closer to what a $8 a gallon. >> how about the fact that the europeans, some airlines are getting away -- they want to get rid of the carbon tax. the carbon tax, i think, is oh oing there's going to be a pushback on the greens here. i think the greens have cost people -- i know that's a religion and i don't mean to go against a religion like green but there's a lot of talk a maybe these additional taxes for carbons have to be taken away until we solve the growth conundrum of europe. >> see what steven says about that. >> i know. >> let's move on to china which posted a $31.5 billion trade deficit for the month of february. surging past estimates of $4.9 billion. february's number clocking in as the widest trade deficit in at least 12 years for the country. disappointing number partly due to waning demand for china's ebbs ports. >> and new greek bonds issued after the country's $106 billion euro bond swap deal last week
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began trading this morning. greece issued 20 new bonds with maturities between 11 and 30 years. we all know, david, the we the situation isda on friday to declare it and a discussion about whether he will use cds to hedge sovereigns in the future. will the market survive this test? >> it's a fair question. and we'll see. my expectation is people will still use them ultimately. the product at least proved to a certain extent they had not allowed by -- >> maybe not by force. >> perhaps by force. >> why was it such a focus given how -- why did we hear about this? is it something that we should just asterisk. whoever owes money, the bank stocks are all down. maybe -- kelly evans, are the bank stocks down because maybe someone is on the hook for this stuff? >> talks about what was happening to the banks in austria that had to pay out. aside from that, as you said, the market function is expected.
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this wasn't a surprise to anybody. >> i think there was a concern that in -- if you did not get the insurance you had paid for, in this case,cds insurance, you would not use the product in the future. we talked about the ramifications of that buzz then you have people who -- indianapolis stuss who buy sovereign debt who don't feel like they can hedge it so they sell it. >> exactly. that's the whole point. it was. to some degree, it all happened as it was supposed to. >> bhoon time -- >> i just have to say, point blank, i hate a product where i should short your house. first thing you learn in law school is you cannot take an insurance policyon someone else's ferrari. >> can you insure that bond? >> i felt that was okay. insurable interest, fine with me. the idea that i can short your house and set it on fire i think is a mistake. that's a policy that they offer. i think they should get rid of that policy. >> that moves into everything
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that's going on in the mortgage market a number of years back. not nearly as prevalent anymore. that market has died, the synthetic cdos. >> good. meanwhile, the jobs in february, first time in early 2011 payroll has grown three months in a row. question on investors' minds now as signs that the recovery gain steam, will bernanke back off? john is chief economics correspondent with the "wall street journal" here with our already introduced kelly evans. guys, good to sew both of you. >> hey, john. >> what will be the more interesting conversation, the sterilization conversation or the other conversation? >> well, let's start off with jobs because you raised it. you know, i don't think that we should take too much out of this friday jobs report on p. on the same day a lot of wall street investment banks were lowering their gdp forecast for the first quarter. we could get a gdp growth of less than 2% in the first
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quarter. i'm writing about this today in "the journal." there's a conundrum here. something's got to give. either economic growth picks up or the jobs growth we have seen isn't sustainable. and i think that the decisions that fed makes is going to depend on which way it breaks. >> jon, you mentioned in your piece today that productivity could be a problem here. it's slowing down. that's a problem in the long term even if it maybe helps workers right now. >> yeah. >> is what you're really raising though the idea that the federal reserve, that ben bernanke is becoming more concerned about inflation? is that why we're hearing talk about sterlized qe and the productivity slowdown? >> yeah, so let's talk about this sterilized qe. as i said last week in two different storeiestories. there's a meeting tomorrow. the fed is highly unlikely to do anything at this meeting. as i said a second ago, they might decide to do more qe but
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it depends on how the economy breaks. they've got several different options they can take. one of the options is sterilized qurks e. is the fed becoming more concerned about inflation? bernanke testified a couple weeks ago and he didn't sound very concerned at all about inflation. >> why sterilize it, jon? it's such a confused mixed message, why not just say they're going to do another round of bond purchases? what's the point of the sterilization? >> right, well, you know, that's a good question. and one of the reasons why they might not do it is because it would be too confusing to people. but, you know, let's say we're in an environment where growth slows down. we don't get any more improvement on the employment front. but inflation is right around the 2% level that the fed is targeting. well, maybe if they do a sterilized kind of program, they kind of restrain inflation expectations for the future. the fed doesn't think inflation is a problem. that it don't think qe is causing inflation. but they're very concerned about
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market perceptions and public perceptions of how, you know, how the public is going -- ben bernanke does not want to be blamed because you're paying higher prices at the pump. >> he doesn't want people to think they're going to get a lot more inflation in the future. that's why they did operation twist. that's the only explanation for why they did operation twist last year, because, you know, the inflation numbers had picked up last year. they wanted to put more money into the -- stimulus into the economy but they didn't want to get people riled up about future inflation. >> i think it would be better for them to try to stick to a message. >> again, i want to emphasize, they're not doing anything tomorrow. this is like -- they have several options. if they decide to do it in the future, this is one of the options on the table. they have to think through under what circumstances they would use different kinds of options. >> jon, i got to tell you, i think it's a worldly conversation. houses have been absolutely horrible. it's not taken into account in
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this. the oil, i keep hearing people linking the supply to oil. if you saw this iran situation, oil is going to come down. everyone wants to pin the tail on the fed. i think it's bogus game. >> shouldn't the fed be saying, look, this is not our problem and avoid using people by using the sterilization. >> i think the fed should be saying what isn't their problem. in the fed's perspective they have a dual mandate. they want maximum employment and inflation around 2%. so, you know, the view of a lot of people there is that they're m miss missing the mandate on the employment front and asking themselves can they do more. >> do you think 200,000 for three months is missing that part of the mandate? >> sorry. say that again. >> is 200,000 for three months in a row, is that falling short on the employment mandate? >> well, an unemployment rate of 8.3%, i think you can say is.
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that's what some people -- yeah. i mean, these are all fair points. and i think if it continues, then you're going too s a fed that isn't as likely to do another round of bond buying. if they keep seeing these improvements in the job market. but again, there are some doubt there's about whether it's sustainable because the economy isn't growing very much. >> kelly, why don't we do -- why doesn't tim geithner step up to the plate and offer $500 billion of 30-year paper and put away the idea that one day we'll be greece? what keeps him from doing that? >> why not take this moment to say our fiscal situation or economic situation is completely different? >> why not issue it the longer end as much as you possibly can because we have 30-year paper? >> instead of doing that why don't they come up with a long-run plan for the deficit? forget about playing with the yield curve, why not -- >> why not playing with the yield curve? >> well, but, jon, jon, you're right. >> save a fortune. >> it comes up time and again when you have conversations with a lot of ceos, is their number
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one issue, when are we going to take a shot at this beyond being forced to do things because our political leaders run able to. >> the treasury has been trying -- >> it may not come up this year. we may not see a conversation whatsoever about the deficit in the course of the year, right? >> of course. i'm pointing out the irony that you can fid with the yield curve if you're time geithner or propose bold solutions with dealing with the deficit in the long run. >> latter one. >> a lot more powerful than the former one. >> the treasury has been trying to push out the average maturity of the u.s. debt huge demand for short-term paper op bills. market demand, investors want more of the short-2er78 stuff which interviews with their whole to push that out longer. >> our rates are ridiculously low. they're crazy low. i mean, geithner, when i asked him about this, geithner says, look, the short term, we save so much money if we do short-term paper. what a bogus answer. i like geithner though.
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>> i think kelly answered. they are trying to issue more and have been doing that. >> 30-year, $500 billion. >> if it doesn't work, 100 years. >> yeah, why not do the soviet railroad bond strategy. >> 50-year. goldman sachs 50-year bond, remember? >> there are a couple of hundreds out there. >> yeah. >> yeah. >> even britain has twice the average maturity in terms of their bond portfolio. than the u.s. 12 years versus 6 or 8. >> 100 basis points increase overall in rates. we're going to get so swamped. it's going to be frightening. >> 30-year piece of paper. take it off the table that we're going to be greece some day. >> to jon's point, take it off the table by actually doing something. >> please, we can't do anything. >> please. >> trying to present congress as being a realistic group of people? >> yeah. >> i didn't mean that -- >> jon, thanks for your time. >> you can only control what you control.
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congress is what congress is. but someone's got to step up and say this is what we should do. >> jon, thanks. we'll talk to you later. kelly, thanks to you, as well. >> spirited discussion. >> absolutely. >> you didn't like my white swan thing? >> that's greece. first developed nation to default in over 60 years. although by the way, 60 years ago there were a lot of them, so will the greeks need more bailout money and what does the debt deal mean for the euro? we're going to help you capitalize on currencies, next.
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carl? >> people talking about my halo. i always love that. i always wanted to have a halo on my head. about 459 minutes into trading, let's go over stocks on the move. urban outfitters leading the nasdaq ahead of the fourth quarter earners. the new ceo, tempur-pedic downgraded to market perform at raymond james. the ceo will get in touch with that guy. he's one of the most aggressive when it comes with select comfort tempur-pedic. lows h lowe's hitting a new 52-week low. price target rates to 40 from 30. why not be the latest guy, how howe late do you have to be on lowe's to upgrade it?
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>> i don't know. how late do you have to be? >> i don't know. when it gets to 50 there will be some guys. i don't understand why people didn't upgrade lowe's when it was very clear the restructuring was working. at jim cramer, twitter at jim cramer. still people angry at me on soda stream. my soda stream, i fixed it during the break. feel better? halo. >> halo. >> i feel like beyonce. >> it really -- there. >> halo. halo. >> halo. >> i like it. halo, thank you. >> i need a devil here just to balance. >> rig one up when you rig the exchange. >> a lot of people put me in that camp. >> same gem. >> thank you very much. let's give you a little more on the m and a vote. play those drums. gets me going. hear the faber report drums. i did want to mention a large canadian company that interestingly is one of the bigger m and a stories of the day. again, we have had not much to speak of. but a company called viterra
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which is in the grain handling business. ships 24 million tons of grain and oil seeds annually. 45% share of the canadian market. owns the 50% of the elevator capacity. 75% of the canadian primary in elevator has assets in south australia. take a look at that. nice move up there. potentially from glenn corp. the ceo late last week was in an interview asked who the company received offers. he said no, there are the company had to come out and say, actually, we have. typically you want to answer those questions like, we do not comment on rumors. that's why the pr people tell you to do that because then when you say the opposite and it's not true you have to come out and say what is true. in this case it has put this company in plague. glen core a potential bidder. we want to point that out because this is a very large company.
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glencore 3 1/2 and 5 1/2 billion canadian dollars. >> what is the analog? archer daniels, bungee? sounds like it's all things and i don't know if a lot of people have heard of it. >> largest industrial oatmealers. >> wow. >> and the third largest pasta manufacturer in north america and the largest maltster in australia. 53% of the malt production. who knew. >> i had -- cold 45 malt liquor. >> i did not have any this weekend? >> no. >> i am a coors -- >> i find that hard to believe. >> i'm a coors light guy. >> how do you like your malt liquor. >> hard to keep him away. >> i can see that. in your harley gear. >> yeah. i like to go to bottle but they don't call it bottle king. i call it bottle king. i'm from philadelphia. >> you're from philly.
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>> be you don't call -- >> every alcoholic drink in the world you've had. >> true. >> conscious. you hosted the "today" show on friday and i had to mention gasoline and i worked so hard to pronounce it gasoline. i go to popeye's a lot when i go. i'm told it popeye's. these are hard for me. i want to put that out there. >> we'll get you a coach. it will be fine. >> thank you. when we come back, is the tech rally headed for a correction? t.i. cut the profit forecast last week on softening demand, especially in wireless. stick around. we're back in a second. now that greece has gotten debt forgiveness, why wouldn't portugal want it, why wouldn't ireland want it? >> i would discourage them from going this route. none of them have extraordinarily high levels of debt. reduced by 100 billion euros. >> travel to greece, portugal is the more likely case of a
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company to require that and maybe eventually exit like greece. americans are always ready to work hard for a better future. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries.
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♪ ♪ the isda declare that greece is officially in default and restructuring the biggest in history. euro currently at 1 30i7b $31 as the eurozone takes the next steps, ho do you play the euro from here? axle amerimerck is here from mon view, california. good to see you again. >> good morning. >> big meeting today of the eu ministers set to approve this package for greece. to what do we direct our attention now? >> well, the thing we've seen is that everybody hopes for the best but plans for the worst. we've seen a trillion dollar liquidity provision but the rest of the world, the federal reserve, bank of england, bank of japan, everybody has been
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printing money. that's what we have to focus on. earlier i had this discussion about are we going to have more easing in the u.s. or not. do we want to confuse the public? well, confused are the central bankers and they printed so much money that they have taken away the gauges of what to even look at. in the u.s., we are micromanaging the yield curve. the most important gauge to get the feedback in the economy. everybody is going to take a step back and say, all right, i hope this shift holds here. already we see the yields on these new greek bonds are not exactly sustainable level. >> meanwhile, in spain, they're saying that they're trying to go revisionist on their deficit targets. a lot of attention being paid to portugal now. i mean, is it -- is it as simple as saying we did greece and now we turn to other countries in the periphery? >> the challenge with all this help is that it takes away a depression from the market. the great thing about these t tremendous yields in these countries is it provided incentives.
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everybody engaging in reform because of inzent i. that has been taken away. what needs to happen is these countries need to own their own problems. and greece, germany's blamed whenever anything goes wrong. the greek need to blame themselves. something has gone very wrong in europe. we are going to continue to have problems. as far as the currency is concerned, since you asked me about that, the europe is not going to fall apart when you print these massive amounts. what will happen is the money is not going exactly the way you want it to go, just as in the u.s. it doesn't go to housing. instead yet again it's going to go where the greatest monetary activity is going to go. precious metals. >> the future for the euro then looks like what in the near term? >> in the near term there is tremendous hort positions that need to be unwound and short term there is relief that money will recapitalize in the bank that's been provided giving them earnings boost. so we think that the euro is going to hover around here. maybe strengthen a bit on the backdrop of inactivity by the fed for the short term and the
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medium term, the euro will be okay but the australian dollar and canadian dollar should do much better than the euro. the u.s. dollar though is going to continue to lag. >> axel merk joining us from merk ingestments. bank stress test results to be an understand nod later this week. after the big 2012 run-up will the data further ignite the high f[ matrade? night-vision goggles, s in
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hear are stories we're squawking about. 7:30 on the west coast. 10:30 on wall street. apple and ibm among the stocks rising to all-time highs. ipad makers are surpassing in today toes session. big blue hitting the 2 in 1 mark. shares from homebuilder d.r. horton to a new 52-week high. a bunch of firms are starting to push the homebuilders. jp morgan chase the biggest decliner in the dow. i find that surprising given the fact they have revenue growth. we're going to look at the banks in a moment. internals in the markets today. look at the dow, up 15. nasdaq down 6. s&p down 1 1/2 points. the dow is down two consecutive weeks. the s&p is up four consecutive weeks and up nine of the past ten. quickly look at today, the nyse, roughly even. simisimilar story at the nasdaq. although you never know. about 13 to 8 decline look at
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the nasdaq decliners leading advancers. one hour into trading. chicago, get more on the market's latest moves. cnbc contributor, director at tjm institutional services. jim, good morning. do you think unless we get to 13.75 in the next three days you will consider it a bearish signal? >> right. imbalanced. i think the more compelling argument is for stocks than against. when you talk about the economic data getting better but at some point in time you run out of momentum and you need to a. correction. keep in mind the correction is definitely in the context of a bigger, longer bullish move. i think we could easily get in on the downside and trim the edges a little bit. giving it three or four days to take out the highs of february 29th. if you can't do it again, take a shot on the short side. >> you think krould crude would go along with it? >> crude should go along with it. i don't want to be short crude. you risk that headline coming out of the middle east.
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so i think crude will go along with it but i wouldn't be as confident being short crude as i would being short stocks. if you want to look at it risk down, risk off. over the last month the consumer staples have done better than the banks, which are kind of a poster child for risk on. to me it already seems like the whole risk on motion is losing a little momentum. >> if, in fact, we get this you would expect this back to fixed income? >> i would. and i do think that longer term i don't want to tie up my ten-year money anywhere near 2%. but i do think we have the correction as always the knee-jerk is going to be to buy the long end of the yield curve. i think that probably goes a little higher before it starts going lower. >> any outlier from the fed tomorrow? >> no. i think they were in kind of -- they pride themselves on transparency. they have every opportunity to tell us what they're thinking and they've told us very clearly what they're thinking. they may talk a little bit in the wis. i don't think they want to increase that balance veet sheet right now.
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they showed us that if things start to get a little bit dicey, they're willing to do whatever it takes the port time being, strong economic data probably don't surprise us. >> talk to you later. one hour into trading. let's head over to the nymex as well. check on the energy markets. sharon epperson is standing by with the latest on that. >> we are seeing a pullback here across the energy complex. you just heard that trader's perspective which is mimicked by many traders here on the floor. you don't want to be short crude oil right now. touting their energy progress. talking about the decline in oil impacts in this country. but the fact remains that consumers are paying $3.80 a gallon for the national average up 30 cents from a year ago. obama administration has said that they are going to use all available tools to combat these higher gas prices. whether that means tapping the spr remains to be seen. the fact remains that they are also probably going to look into what they are calling of course
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manipulation of the oil market. whether that's manipulation or speculation, there is definitely a trend of more money managers and gas lease prices are going to go higher. if you look at the record level of net long positions in this marketplace, that tells you that there is a lot of money, betting we're going to see higher gasoline and oil, especially prices going forward. keep in mind as well. totally different story when you talk about the natural gas market. once again, traextraordinarily m weather this time of year. as a result, we're looking at natural gas prices that are at their lowest levels in a decade and now approaching and let's see if we can hold this $2.25 level. david, back to you. >> thank you very much, sharon epperson. banks have been outperforming the broader markets so far this year. of course, not in year's past. by a pretty good margin. as we await the results of the bank stress test which will come out later this week, we'ring at
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the best ways to play the financials. president and cio, portfolio manager of two financial funds. antoine, the banks were weak today. any particular reason why we're seeing a i cross the board losses of some of the bigger names of 1% to 2%. >> i think there was a piece out over the weekend and one of the news services really talked about the fed pushing back against a lot of the banks, assumptions, particularly being progressive in consumer and home lending. i think there's going to be some haves and have nots here. probably thursday afternoon and friday morning. >> what would anticipate at the end of the day the stress test results are going to be good for the banker sector, right? >> i agree with that. overall, i think it will look very good for the banking sector. industry is really rebuilt its capital. i mean, we've got $500 billion in common equity up from $300 billion three years ago.
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healthier, low reserves, well on their way toward meeting the three requirements. on the way as well. >> a lot more capital as we've said, as you just said. and potentially an ability to return more earnings s ts to shareholders in the form of dividends. is that something that will drive the stock or looking at given few people would expect that we're going to see, you know, significant improvement in earnings over the short term. >> yeah, i really think that that's going to create the biggest noise out there. you know, for instance, we take citi, citi's expectations are they are going to increase dividend from one cent to four cent. people are on the fence. are they going to get a buyback approval second half of the year, maybe none at all. maybe right now. but clearly if citi can buy back stock, it would be great message and the trade so far below book value the math is phenomenal if they can buy back stock here. >> anton, there had been a
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bifurcation in the last few weeks. some of the regional banks, u.s. bank corp. or even some of the ones in ohio that people trade, fifth third, huntington, had started to do well versus the big international banks. was that just a fanciful moment and they're still going to trade back together at this point? >> no, i think, you know, the trade is right. i think there's more capital. i believe the russ belt of ohio is actually doing quite well. resurgence in car manufacturing. so, you know, i think those banks are in pretty good shape. fifth third is on the list to return capital and buybacks. so there's no doubt that those guys will probably be the strongest performers going forward in terms of returning capital among the regional banks. >> anton, bank of america remains a major focus and american people who call in on "mad money," my other show, this is riddling the portfolio. . it's almost like everyone at one point owned bank of america.
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we used to think that they were talking about coming in and being able to offer something in return, dividend. it just seems like that's off the ta the table, isn't it? >> i would say it's off the table. expectations entirely off the table today. anything to the contrary would be wildly positive surprise. i don't think they've asked for it. i think last year that was kind of a pr issue. they've asked for it and got denied. there's no doubt that they're building capital pretty quickly. the earnings power seeing a little challenge right now with all the mortgage settlements. the stock remains very, very cheap and a favorite of value investors and people who like to trade because it's a cheap stock. but i think longer term you make more money on it. just not sure you make money out of the results near term. the company is getting healthier and healthier building capital, she shedding noncore assets. >> anton, let's not forget these move, they've had significant moves during the course of this year, haven't they, the group overall. doesn't that make you at all
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cautious? >> the interesting thing is, you look at how much bank of america was down last year and it was a real, you know, push among people taking tax lowesses laten the year. you saw paulson or berkowitz getting big redump shun and having so sell some stock to sam take losses. inthere was undue technical pressure that had nothing to do with fundamentals at thend of the year. i don't think they would want to sell stocks but sometimes you have to. >> yep, sometimes you do. >> thanks, appreciate it. gold bowl still gaining steam? the economy remains in recovery mode, where should you be putting your money? we'll talk bullion versus equities in just a moment.
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♪ it's been a busy month for
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the anniversaries of cookie. last week last week celebrated oreo's 100 birthday. today it's girl scouts. if you got your cookies in the mail or delivered by real girl scout, top five best-sellers. number five at the big wall, trefoils, four, do-si-dos, tagalongs, and samoas, and thin mints. >> put them in your freezer, a surprise the rest of the year. >> malimar thin mints is my favorite. greatest cookie ever made. >> but don't withstand the heat well so we tend to see them in the winter months. >> buy sglnow. give or take a few. six in 60. >> botox is working well for
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migraine. reduces the number of days that people have migraines. brilliant ceo. >> visa. >> people want to play the banks. visa and mastercard are not banks, they're tech stocks. they work. i do like them. >> barclays recommending hershey. >> now, the hershey usually trades with the price of gasoline. people buy the stuff at convenience stores. deviation. major restructuring and really cheap. cut the cost. >> high profile downgrade of under armour. >> this is just valuation trade going too far. i love it. >> barclays likes lupkin? >> you you see it, it goes up and down. takeover name stock. i don't want to own it here. >> big housing play in mohawk which barclays likes. >> this is carpeting. if you want carpeting you go with it. look at sherwin williams. it acts as the greatest stock of the euro. hate it. >> for more stocks, of course.
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tweet time, "john carter" cost the studio a quarter of billion dollars to make. only brought in $70.6 million in the opening weekend. mary thompson asked disney ceo bob iger about the movie on march 1st. >> we're hopeful for that movie. we haveinvised in it. we've got to understand a great creator, great director who has done great work for us in pixar. we believe in him and we believe in the movie that he's made. >> captain john carter, virginia. >> virginia. virginia. >> david, the favorite scene. our twitter question, how should disney have spent that money instead? tweet us. we'll get your responses later
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on. >> carl, people on twitter say it was a good movie and the trailer was bad.
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"squawk" on the tweet this morning. disney's "john carter," cost a quarter billion dollars to make, generated $30 million domestically in the first weekend. we're asking you, instead of "john carter," disney should have invested $250 million in blank instead of blank. how about creating a 21st century version of "it's a small world." disney should have invested $250 million in free admission at disney world in florida foreclosed home eners. disney should have spent the money bringing down our deficit instead of "john carter." buffett would have matched it. probably would have knowing the promises he's made. people on twitter say the movie was not as bad as the trailer made it out to be? >> look, i saw the trailer. i said, look, i got to miss that. i mean, there are people who are coming on saying you are judging it by the trailer.
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that's a mistake. quite exciting to look at. i'm an open-minded fella. no one's ever accused me of being a to go see it? >> yes, i am. that's what i'm going to do. >> it's a beautiful day. i hate to be indoors. maybe we should just take a walk and get it over with. >> i'll go. >> i'll take a look at this movie. i want to rewind the tape. bob is a good man. his birthday is the same day as mine. >> we noted that disney shares were up. the trend as you well know has been toward blockbusters appealing to that 14, 15 year old. that's where we are in the movie making business in this country. you have to make big bets. >> by the way, just so people know, i know this is "star trek" and not "star wars." i also know it's mr. spock. >> when we come back, bob pisani with amazing bars of gold on the
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tostocks >> stocks to watch. >> disney. >> jetblue. jetblue in talks of buying a stake in an airish airline. it's part of a privatization drive. jetblue shares under five bucks. tiffany is suing swatch. there you see shares of tiffany. and price target raised to 50 bucks from 39. the company's domestic sales turning around at guess as cotton prices decline. >> that's interesting. india allows exports saying they wouldn't have any. right back at you. >> right. gold off the 2012 low. not back to the high of $1900 hit last august. we talk about gold, of course, we can take a look there. we've seen some gold today. i got reminded once again of how
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heavy a bar of gold is, mr. pisani. more than just bars of gold tonight but the entire industry behind it. >> we're excited about this. a year in the making. i have two big guys here who have been watching me all day. take a look at them. one of them armed here watching over us making sure we don't make any sudden moves. the reason they're standing here lurking over me is these things. take a look at these. these are gold bars. real gold bars. we have two london good delivery bars here. that means they are at least 99.5% pure gold. they weigh 400 troy ounces each. that's about 27 u.s. pounds. this is the standard recognized by dealers all over the world here. the banks take delivery of gold, this is the standard. this is quality of weight going in and out of those gold vaults that we talk about. recently i sat down with hedge fund manager who was advised the university of texas to take physical delivery of gold bars
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just like these. >> i think the pattern is set. the pattern is set that we'll continue to monetize fiscal deficits by expanding central bank balance sheets. you can call it what you want to call it. you can call it quantitative easing. any acronym that the powers that be want to call it. i call it money creation out of thin air and therefore gold has a lot further to go. >> so kyle bass says gold is going higher. you should consider investing in physical. more in the halftime report. as i mentioned, these gold bars weigh 400 troy ounces a piece. hold it. close to 27 pounds. >> they're heavier than i look. >> if you look, you'll see why my head is so heavy. >> how much will this one gold bar, 400 ounces be worth when the market closes today.
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you can win a cnbc prize. tweet your guess. hash tag is gold bar. follow me on twitter @bob pisani. gold is quoted in troy ounces. that's the guess. figure out how much that is worth. >> once you have it, you have to insure it, you have to store it. >> operation grand slam i always say -- can anyone remember when operation grand slam was? >> gold finger. >> exactly. >> you can't rob the gold because it's too heavy. >> you won't throw it anybody. >> you don't throw it. you don't lift it. you need to wipe it off the ability for it to have its value. >> i think it's important. kyle bass insists that gold has a lot further to go. it's his bet primarily a bet on printing. central bank printing.
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>> and that decision was made some time back to have gold but to move it into physical delivery and not just contracts. >> very interesting decision on his part to do that. >> your favorite part of the doc tonight? >> the most amazing thing was seeing the gold in the vaults was amazing and then silver stacked to the ceiling ten foot high as far as the eye could see. going 2.2 miles down to the deepest mine in the world was a lot more dangerous than i thought it would be. over 100 degrees fahrenheit without air conditioning it goes to 140 immediately and you die quickly. i was surprised at how dangerous it was. i have more respect for the people who are involved in the gold mining industry for being very dangerous. >> i know you worked hard on it. i'm fascinated by gold. i'm a gold bug. i agree physical is good. i can't wait to see it. >> it's going to be great. looking forward to it. >> in case you missed the premiere of cnbc's gold special with bob pisani tonight at 9:00
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p.m. eastern time. jim, one more? thank god for john carter. it's all we talked about. >> i'm looking at the reviews. it's 99% positive. >> is that a sampling that can be judged effectively? >> i also want to add i have ceo of associate estates. i put these in the sell block last week. this guy wants to strike back. i think it will be important because i think those are overvalued but his yield is good. >> all right. we'll see you tonight. "mad money." thanks for sticking around. >> thank you, carl. >> see you tomorrow. >> see you tomorrow, carl. >> let's get to the third hour of "squawk on the street." it starts right now. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> i'm seeing a lot of my members, a lot of people in the trucking industry taking a hard
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look buying natural gas powered vehicles. they are really starting that transition already because they are looking for that cost savings that is there. >> if it doesn't work and you can't get started, the fallback position is to say i've got two ceos that can run separate companies. pepsi has a history of doing spin-offs. >> the most important thing for greece is structuinstruct struc make that country more effective. >> the banks are the most cyclical stocks out there. more than caterpillar. more than rockwell. and this group can lead us if only because it is so far behind it is frightening. i love my iphone so much. we're bias. everybody who tries an apple product is bias in favor of apple because it's blow away. >> we kick off a monday morning and big week of trading. opening bell. >> we have a lot of really great
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series that are made in america and they're not open for overseas and then we make blockbuster movies and surprise us by having big sales in other parts of the world. maybe that's the secret of john carter. >> they don't think qe is causing inflation. but they're very concerned about market perceptions and public perceptions of how the public -- >> they don't -- ben bernanke doesn't want to be blamed because you're paying higher prices at the pump. >> good monday morning. markets hovering around the flat line right now. dow up 22. s&p down about 1.5. nasdaq down almost eight points this morning. ibm trading all-time high levels as far back as our data goes stock trading above the $200 mark. shares soaring as two chinese online video companies reveal plans to merge. time for our road map today.
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disney looking at a box office bomb in "john carter." will the company overcome this potential $250 million disaster. chips, are they the canary in the coal mine? they could look at trouble for the tablet world. could your morning coffee get cheaper? lowest level in more than a year and a half. we'll get the trade on java. natural gas continues its slide. one energy ceo says it will stay cheap and another plans to increase its holdings in the commodity. we'll tell you how you can make your own profit. all that and more coming up in the next hour. first, some of the biggest money managers in the world, people who invest money from major pension funds and endowments meeting today in orlando. many managers have made amazing calls in the last five years and have unique treasure on their shoulders. this he have to keep their heads above water despite spending at least 5% a year for their closets. steve liesman is with them today in orlando.
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you are the fly in the room down there. what are you hearing? >> really interesting stuff, carl. this group as you said for private foundations they have to pay out 5% a year by law and the endowments, they don't have to do that but they try to reach for 5%. so what they're trying to do essentially is hit an 8% bogey and call it a 4% world. they try to do 5% returns. and then they want to be compensated for inflation which is running about 3%. that obviously is very difficult and more difficult than it used to be because of what's happened to treasuries. these guys are trying to invest forever. some of them left them $100 million, $200 million, keep the principle the same and use the interest and investment income for the purposes of the endowment or the charity. nonprofit funds in the u.s. total about $1.7 trillion. common fund, their forum why we are at, largest investment adviser for this group. 1.7 trillion under management
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total in the u.s. common fund about 25 billion. here's their poll. they are looking for 8.3% on s&p in 2012. three-year average, 6.8%. that's below that 8% bogey. ten-year yield expected to be 2.2. that may be on the high side. looking for portfolios on average to return 7.6%. enough suspense. what are they doing with their money? here's the poll of where they are increasing their exposure and you can imagine where it is. places where the returns are hopefully higher. emerging market equities. natural resources. more to venture capital and private equity. real estate, 37% of the people who responded to this poll are increasing exposure there and of course commodities. where are they getting out of it? not too many surprises when you look at where they are decreasing their exposure. u.s. treasuries. that's not a good number for them. the yields on those treasuries were into more and now reducing exposure. european equities. cash.
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28%. that's a sign of confidence. only 5% increasing cash. japanese equities. u.s. equities is misleading there because something like -- what is the number? 22% are increasing exposure but thats with one of the highest places where they are decreasing it. a mixed picture there on outlook for u.s. stocks. the other thing they look at not just emerging market equities sitting around the dinner table, talking about emerging market, sovereign debt as another place to maybe find returns they are after. and of course the head of the common fund here, i asked him yesterday if i was 25 years old, would you tell me to put 50% of all my investment in emerging markets. he said why 25? why not if you were 55 years old? people are looking at alternatives and hedge funds and emerging markets as places to goose up returns here. >> interesting stuff, steve. of the arguments you heard for emerging markets, what leads the pack? >> you know, it's the place -- first of all, there's a sense
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they are getting their finances together. it's not the wild west it used to be. also a sense that's where growth is and that's where investment ought to follow. i want to give you one other conversation we had around the dinner table. the idea that if returns are so low, should the government change the law to make it so private foundations don't have to pay out so much and what i was told is it will never happen for political reasons. the fear is that these private foundations are formed as trust funds for the kids and they're for the really private foundations so that 5% rule even though it's harder for these guys to hit, likely to remain. >> that's why they're there to create those payouts. steve, looks beautiful down there. look forward to a lot more today. >> thanks, carl. >> steve liesman joining us in orlando. meanwhile, disney's "john carter" costing more than a quarter million dollars to make generated $30 million democrat s domestically in the first weekend. disney is up. our next guest maintaining a strong buy on the stock.
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standard & poor's senior media and entertainment analyst joins us to tell us why. how do you explain what obviously the company would admit is a tough weekend for the film? >> sure. i think by any measure "john carter" was a disappointment and this happened just about every year. last year, you remember, we saw that in 2010 and by any measure we're probably looking at a potentially significant write-off on "john carter." i think investors seem to have a relatively short memory when it comes to box office volatility that's why you see disney shares shrugging it off this morning. >> the write up in the "times" said the company had a good idea the film would not do well. they put marketing into it to stay on good terms with the director of "wall-e."
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does that make you reconsider the judgment of those in the film division or not? >> that's a very good question. i think you touched on important points. first of all, i think with regard to andrew staten, this film shows that success in animation doesn't really translate into live action world. we have always known that. and vice versa. more importantly i think that what you're seeing now is probably another signal that disney is going to look to refocus on its core competence which is branded films. clearly "john carter" will not be a franchise sequel as the company intended. looking beyond that, what we saw for this film if we can touch on that was last weekend's open where the marketing was lackluster and the trailer left quite a bit to be desired. no surprise that the film performed as it did based on what we saw going into the
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opening. >> i mention the call that you probably red. they argue that we are nearing a tipping point where distribution is gaining an edge over content. they are looking for companies that are less reliant on iptv. things like netflix model. they think disney given espn and parks is one of those and they take it to a buy whereas it was at a neutral. do you go along with that? >> we have a strong buy on disney for a slightly different reason. i think for disney it's always been, you know, looked at at a purer content play. clearly based on results we've seen from the parks and espn/aespn/ab espn/aespn/ab espn/abc/disney channel, those things are rebounding. i don't think it will go away in the foreseeable future. i like disney's position in that space. >> target of 48, how does it get there and to what degree do gas prices maybe throw a fly in that ointment? >> very good we.
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some of the parks methodology which with gas prices thus far hasn't been a major issue. theme park traffic is relatively holding up well. we would have more concern on the volatility that we've seen in europe and asian regions. thus far we don't believe it's a materially significant risk factor. >> have you seen the film? >> i did. it was, you know, i think it was somewhat below my expectations. i did see the trailer. again, this is one of those films that you learn and you take your hits and you move on. i expect disney to do that. >> hated it. appreciate your time. good stuff. >> always. >> when we come back, toyota wants to sell 2 million vehicles this year. back in two minutes. 3q
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a new poll shows president obama in a dead heat against possible republican challengers mitt romney and rick santorum. brings us to squawk on the beat.
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sales of toyota's prius up last month because of the hike at the pump and they are now releasing a new less expensive model. here's a look at what shares of toyota are doing today. phil lebeau live in chicago with more on this and whether or not this will sell, phil. >> i think it will sell in combination because it's at a lower entry point in terms of price. let's take a look at the new prius c. it's a small hatchback starting under $19,000. 53 in the city. 46 on the highway. as you take a look at the hybrid market, keep this in mind. prius dominates this market. always has. continues to do so. over the last three years it has steadily picked up market share according to truecar.com. hybrids overall in the u.s. are taking up a smaller percentage of overall vehicle sales. just 2.3% of the models sold last year in the u.s. were hybrids. that's because at the same time these are coming out, you have more fuel efficient models rolling into the market.
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look at the fuel economy of the average new car sold in the united states. it hit a record according to the university of michigan last month at 23.7 miles per gallon. there's more competition out there for the prius and for other hybrids so it will be interesting to see as gas prices go up, if there will be as much demand as there has been in the past. as we look at shares of toyota, keep in mind prius is critical for them to make market share gains they targeted for this year in the united states. they would like to sell more than 200,000 hybrid models and one last note about toyota. jim lentz who we often talk with on cnbc last week was promoted to the title of ceo toyota motor sales. he'll take that position moving up from coo here in north america and for toyota, this is a big year. they are targeting market share gains and prius. expanded lineup is a big part of that. >> fascinating. the bit about cars overall and
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their efficiency getting better. is the prius also has efficiency within hybrids gotten better over time or is there a ceiling to that? >> gains are not as great as what we see with internal combustion vehicles. you see turbo boosters added to those engines and there is so much more efficiency that they get out of those engines opposed to hybrid engines. >> we also didn't mention another big piece of news and that is vw earnings. monster. >> huge. $20.1 billion annual profit. compare that with general motors annual profit last year of 7.6 billion. a big discrepancy between the two of those. that speaks to the strength that vw is seeing in europe, in china, growing in india and think about this. they're not really doing much in the united states. they are growing without the second largest auto market in the world. >> it does make you wonder why they should be seeing strength in europe relative strength i
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should say, relative to what gm has been able to do in europe which is having a tough time getting out of the red. >> germany is a big part of that. that's the strongest economy over there. vw dominates in germany. >> all right. thank you for that. very interesting stuff. when we come back this morning, is your tablet in trouble? why your ipads, kindle fires, nook, even your galaxy could face serious problems in the coming months. we'll explain after the break. ♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪
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33> 33 names hitting 52-week highs today. most recently joining the list, home depot and ww grainger. take a look at the dow intraday today. we have traded in a 43-point
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range so far. that is the narrow estrange for the dow since april 4th of last year. narrow estrange for the dow intraday in almost a year as we barely budged off these levels here trading right now up 22, almost 23 points. chip sales experiencing a slowdown. is that a sign the sector is due for a breather? our chips the proverbial canary in the coal mine in the tech sector. good to see you. >> good morning. thank you. >> we were thrown for a loop by the ti news last week. you spent time traveling to california in the past few weeks. the view appears to be wait until second half. >> it appears to be -- a lot of it is wait until second half, but i think things will be guided up for june quarter so march quarter is going to be -- we're in a bottoming process. it's tough at the bottom. it doesn't bottom and go right
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back up. we're in a bottoming process and ti and it was the same thing where altara took numbers down slightly. >> what's led us to this moment that we're? >> severe correction at the end of last year. a lot of it was people were afraid the economy was rolling over and demand was rolling over when it was relatively okay but companies stock was down drastically at the end of the year and that buried the companies and now we're in the bottoming process in march. expect positive guidance for june. some in the back half of the year, a lot of companies i talk to say communications is potentially coming the back half of the year which is always a danger. that area is danger. communication. >> overall inventory numbers? >> extremely low. multiyear lows. what i do is i check it on the supply chain.
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27.5 days which is 3.5 days lower than the prerecession like 2007 levels. >> where does it lead you on big names in the sector? >> i think we have more upside to go. if you just call it in semiconductor index in general, there is more upside. i don't think you'll get beaten in the march quarter guidance reporting season but you'll get a raise for june and we'll be good. >> you don't see any -- we are at the bottom of the cycle. no near term pain. you don't think buying opportunities would present themselves in the near term? >> i don't -- >> ahead of a rebound in the second half. >> i think people are looking to buy any dip. ti disappointed and it hasn't budged. people are looking beyond the bottoming process and rest of the year into 2013. >> you cover a bunch of them. favorites? >> right now i'm looking at
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secular growth on fargo and maximum technology integrated because of exposure to smartphones. they are growing 30%, 40%, they have that exposure in terms of handsets. and then looking at two distributors. they have operating leverage. >> some are using weakness as precursor to broader weakness in tech. i assume you think that's a misguided call. >> i think that's a misguided call. it's tough at the bottom. we haven't bottomed. >> valuations on these names? >> many are okay. some i recently downgraded because they were stretched. the expectations got elevated. >> those names? >> silicon labs trading forward. stocks were hitting close to 52-week highs.
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some of the other names have trading like mid teens which is reasonable. >> interesting. we hope it's true. thanks very much. >> thank you. >> good to see you. straight ahead this morning, how members of the eurozone plan to fix instability plaguing europe. finance ministers gathering in brussels today. we'll take you there live and coffee hitting levels it hasn't seen in more than a year. we'll tell you which stocks are still with your money when we come right back. (
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that's >> that's right. thanks to daylight saving time, the markets in europe don't close for another hour. this happens for the brief period when we spring forward and they do not. same thing happens in the fall when we're off by an hour's time. in the meantime, look at the intraday action. very narrow range today for the dow. up just 18 points. the narrow estrange about 45 points total since april of last year and then a lot pointing to the vix as well which is at some very subdued levels. not something you would expect
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given the uncertainty around the low. we have been looking at some earlier levels almost close to 15, which some people feel relatively bullish about stocks despite some of the action we've seen over the past few weeks. many people saying there's nothing on the calendar in terms of europe and bond supply for the next few weeks and as a result markets will be allowed to refocus once again on u.s. fundamentals and fed policy ahead of the fed meeting tomorrow. bob pisani is here to check on the markets. it will be a busy week. data coming our way. >> the important thing is just on europe we're closing flat to slightly down. the weak market is greece down about 2.5% if you put up the chart there. greece did complete its bond swap today and that was the important event for greece. you see down about 2.5%. the important thing about today is on the risk off strategy here we're seeing financials weak,
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energy stocks weak, material stocks on the weak side. consumer discretionary here. you can see not a lot of moves to the downside. that's weak. the big question i've gotten today is what the heck is going on with the vix. you have a situation where the s&p 500 is down and particularly the big risk on sectors are down. you would see the vix going up. in fact, the vix is hitting new lows. take a look here. we're at 15. 15 and change. the lowest level we have seen for the vix since going back to july of last year. i got a lot of questions this morning. why is the vix down on a day when s&p particularly major sectors are moving to the downside. should move to the upside. i think what's going on here today is there's a technical thing happening. vix is rolling into a new contract today. and for various technical reasons, remember the spot contract on the vix is composed of the two contracts that are out in front of it. we're rolling over from march to
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april to april and may. i don't want to get too technical. bottom line is put up the vix futures curve and i think you need to ignore the vix today. the spot vix. look at the futures curves further out into april, july, october and bottom line is this is what you want to look at. still high if you go out a little further. still expectations that people are anticipating we're going to have volatility out into the summer. that's really what you want to watch here today. i think that's the most important thing. i want to note home builders today. they are on the upside most of them. when most other major sectors on the downside, a huge move on some generally positive economic data and positive home data. spring home buying season looks to be fairly good news overall for them. we're looking at increases on orders anywhere from 20% to 30% for spring home buying season. that's about in line with expectations and may even become better than expectations. so far cautiously i think people are feeling the spring home
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buying season is really materializing. >> even as we've seen some downgrades of the names based on valuation. and big data points for the week. retail sales tomorrow. fed meeting. >> inflation. >> inflation data. >> on the home builders, i get this question all the time. new highs right now. of course the problem is the market is pricing expectations of spring home sales up 20% to 25%. that for sure is in the market. how much more can they move up? the answer is if the economic data continues to get better, a lot of people moving on the sidelines will move back into stocks if this happens. you can get the stocks over valued. that can happen. we know that. >> also because rates are still low. mortgage rates are low. thanks a lot. meantime, as we mentioned earlier, coffee prices falling to 17-month low today due to prospects for record global crop. we'll talk about how to make money from this on the stock market. first, let's talk about what it means for the cost of your morning cup of jo.
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james, good morning to you. >> good morning, carl. >> walk us through the dynamics of what's happening right now. >> certainly. last year in 2011 there was so much made of the fact that the colombian production figures were extremely small. colombia used to produce 13 million bags per year and over the last three seasons they were only producing 9 and 10 million bags. colombian coffee is highest desired. it's the sought after bean by starbucks and the like. the reason why we rallied toward $3 over the last year or two was less colombian situation and more of the fact that prosperity in brazil was causing farmers there to hoard coffee just like someone would hoard cash or gold and that kept coffee off the market. >> interesting. so now conversely, there's no hoarding so much as putting coffee on the market trying to raise some cash, right? >> absolutely.
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there's not been that much made of brazilian economy recently though we see it falling dramatically from the peaks we saw a year or two ago. brazil is flooding the market with coffee and millions of bags or so it appears and furthermore, based on open interest in coffee futures, we see they are now hedging this year's crop. normally when a market is about to make a low, you'll see open interest fall as investors liquidate positions and right now open interest is increasing 40% over the last six months telling us that there's a massive amount of fear in brazil by the growers. >> interesting. what price levels are you interested in and where does it need to hold to prevent some further pain? >> when coffee prices are soaring and when they are crashing, very often they trade in 20-cent increments. coffee is approaching the 1.80 level. for those that want to invest in pure play of coffee, we would
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buy half at 1.80. 1.60, we would jump in with both feet. >> we'll talk about the stocks specifically in just a moment but before i get to that, i wonder would he -- should we expect some movement of prices as we get our cup of coffee in the morning? >> we'll find out very soon. often coffee companies starbucks and the like will hedge some of their costs going out and we'll find out how heavily they were hedged. if they were positioned in the market at 210 or 220 and they had a large hedge on at that level, we're not going to see prices come down. we're going to find out what good traders they were if they were not hedged. they should be able to take advantage of these prices right now and coffee should fall 10 cents or 20 cents rapidly. >> that's why it takes a lot of skill to be a trader of raw materials. james, appreciate your time. thanks a lot. >> any time. >> let's talk about how to play the stocks on plunging coffee prices as well on the cnbc
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newsline, sarah is senior analyst. good morning to you. >> good morning. >> what does it mean for some of these coffee guys? >> well, i think for starbucks in particular, they don't hedge so much as buy in contract well in advance. so 12 to 18 months is typically the amount of time between when they are buying coffee and when they are selling those beans. what that means is there's a lag between when the prices move on the commodity markets and when you see at starbucks p & l statement. first quarter ended in december and second quarter ended in march, there was a huge headwind in terms of coffee because those beans were the ones that were bought 12 months earlier when coffee was really spiking. they actually had a 20 cent headwind for starbucks. the following couple quarters
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will get the benefit of when coffee really pulls back and we'll have a much more modest headwind with roughly 18 cents in the first half and 5 cents in the second half. what this means is that for the fiscal 13 they are buying in a way that's quite favorable. you get a reversal with some of the real strong headwinds that they had for the past two years. >> it's been a really rough go. your universe starbucks you don't cover duncan but mcdonald's, wendy's, yum. i wonder who does this help the most, this reversal of fortune? >> it certainly is starbucks. this is the core of their business. it's 20% the cost of goods whereas for others that you mentioned, the hamburger guys, they are much more concerned about beef prices than about coffee. it will be starbucks that benefits from seeing these lower costs. what i'll say is when coffee prices spike, they really didn't
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take prices up that much or at least not nearly as much as their own prices went up. they had real margin pressure. i think as we see coffee prices coming down, we'll see them be equally strategic about whether or not or how much of that price they passed on the downside. >> last week the big news regarding starbucks taking on green mountain with single serve machines. is that a game changer for the company? what was your reaction to the news? >> my reaction was i think i got to buy one of these. they do brew coffee and they do espresso based beverages. that's up until now that's not been something that you can easily access. certainly not with starbucks products. i think, you know, i think with services there with those machines they can grow and that may very well be the case. it appeals to people with
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wanting a variety of flavors in coffee. it will appeal to people who are starbucks loyalists. i think it could be a game changer. >> what a week it's been. what a year for some of the names in your universe. thanks for your time. >> thank you. >> when we come back, lowering gn nat gas prices may be here. what does that mean for your wallet? [ leanne ] appliance park has been here since the early 50s. my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well.
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welcome back. coming up next, setting up for the stress test. will bank dividends double? plus, big bull on disney as mouse house immune to cord cutting? we'll talk to a top analyst who just upgraded that stock. vix collapsing. what's behind today's steep drop? pete nagarian breaks down the trade in wall stra"squawk on th stree street" fear gauge. natural gas prices hitting ten-year lows as heating demand cut this weekend. inventory levels soaring to record highs as a result. are low nat gas prices here to say? joining us is chris jarvis and phil weise, sr., joining us to discuss. guys, good morning to you.
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chris, do you think we go below $2? >> yeah. like you said, we started the heating season with record amount of storage and we've had the warmest north american winter on record heating demand is as week as we've seen it in 15, 16 years. as a result we'll end the withdrawal season with 2.3 ctf in storage which is about 50% greater than five-year average and all-time high. long and short is prices have to continue to go south. $2 is the next stop. we'll reach $2. we need to have that to get production to come down a bit. >> get that excess storage out of there. you think it would take five weeks of winter cold to get inventory levels down to normal levels? >> that's right. if we think about the fact that we're about 700 bcf over normal levels, that's about how much it would -- so 140-week it would take four weeks to get to that level. >> that's unbelievable.
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either get a bunch of cold -- are you along with chris in getting this to high ones and lower the inventory? >> i think that's certainly possible. >> how about the stock side in terms of the names? big journal about chevron trying to increase its assets. how does this effect the names in the trade? >> for companies like chevron it's an opportunity. there should be some assets out there at a good price and chevron has the balance sheet and cash to be able to acquire some things from distressed sellers. on the company side, we got a company like chesapeake which i had a sell on. they are tight to natural gas. they used to be hedged in third quarter last year. they took off hedges. they don't have hedges to protect them against gas prices. so much production is natural gas. they are trying to move more toward liquids but they have a big cash shortfall and they need to sell assets to have any chance of covering that. >> recent announcement by ge and chesapeake trying to get natural gas into a surface fuel in a big
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way. when does that happen? when do we cross that tipping point and what happens to prices as a result of that? >> if d.c. won't wake up and focus this country's energy on natural gas, the private industry will. basically you're going to see a lot of private capital come in and try to take advantage of this disparity. it's going to be long-term. three to five years. structure build up. at the same time, it's a great announcement for this country. i'm excited about it. certainly it should bode well for natural gas market. >> it sounds like if we do in fact tip these secular lows in summer, that's it. you don't see us going rehitting those or retesting those levels after that? >> i think prices will clear out inventories that we have in there. price alone will be enough to change fundamentals quickly. 2012 will be the year to get
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natural gas and take advantage of this price valuation. longer term natural gas has to become the backbone of this country's energy policy. if you believe that, this is the year to be buying. >> phil, the degree to which you agree with this surface fuel argument and how patient are you? are you really willing to wait until policy makers come around to this kind of thing? >> the problem with the policy makers is they always take so long to make these decisions. i think we do need something to spur demand. my only concern is that recent presentations by exxon and conoco phillips and other companies show that even as they switch their capital to the liquid rich plays, there's associated gas. it's not so easy for us to reduce production until we get change that will spur demand. >> great point. guys, appreciate that. good to talk to both of you. chris jarvis, phil weise to talk natural gas. management shuffle and what does that mean for pepsi.
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the boss of segments on the way in just two minutes. we'll be right back.
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time for something we call the boss of all segments. pepsi announced key management changes today. let's bring in our two management experts. the former ceo and chairman of medtronic and jeff from the school of management. before we get to the gentlemen who are being brought in. let's talk for a moment about the ability to execute. do you think her tenure is under some kind of threat? >> no. i think not whatsoever. you look at the long-term enterprise building there and it's a fantastic story. this is a company that was $35 billion business when she took over. this is a $60 billion business. highly profitable. incredible emerging growth story. they are about 45% of their
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revenue from outside the u.s. alone and this is really growth under her reign. where they are in russia and what they've done in china incredible deals, africa, middle east and of course the focus and innovation. they've been putting 9% of revenue into renovation while average s&p firm cutting it by 3%. this is a longer term story. that's repositions. >> i have seen blistering notes about her ability to tackle cost cutting moves that didn't pay off. are you along with jeff and if so, why shuffle? why start grooming successors now? >> i think her motto theme is performance with purpose. we need to see performance. they are losing share in the north american beverage market. they have to get that turned around. one summer i was in business school at coca-cola trying regain share from pepsi. this is a 100-year war.
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you have to perform. that's why the stock has not gone anywhere. i agree with jeff she's doing the right things strategically but the core business has to get there and so i think that's why they are bringing in other people but it's up to al to turn the business around. they'll have to cut cost but focus efforts to regain share against coca-cola. you can't sit back and use that. every point of share is worth more market cap. >> of all corporate battles it's one of the best. what do we know about brian cornell, this walmart executive brought in or john compton being made president? >> we know it's a great catch. i would remind bill that coke on a remarkable comeback and lost its way for 15 years went to the outside to bring in someone as part of their recovery and pepsi
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is making a brilliant move bringing in brian cornell who knows pepsi beverage side and food side. he worked in all parts of this business before. here's a business where they generate $120 million of revenue in retail businesses and someone that knows that retail business cold, a guy coming from walmart runs sam's and ceo of michael's, the biggest craft business in the country, he really knows this industry well and i think he's an excellent addition. this is part of the strategy to build back up brands in north america. in fact, compton started out in its best days and obviously they lost ground there and perfect guy to bring back in. a guy that's president of tropicana in his best days. >> let's take a quick left turn to disney. big investor meeting tomorrow. discussion about chairman and ceo and all over the papers today is talk about "john carter" probably a miserable
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existence at the box office. how much pressure is he under? >> he's always under pressure. he has to continue the growth there and decide where the growth will come from. bob has done a good job in spite of the pressure. he has to find a way to keep a big company like disney growing. these companies have to continue growth. there's no substitute for it. back to pepsi, i agree with jeff on leading candidates but i think they have -- it's good to surround yourself with potential investors. she's eventually going to go out. within the next four years they'll name a successor and whether it be sooner than that really depends on performance. >> they are a sensational team. on disney the biggest pressure on bob iger is for him not to retire. he's great. >> you don't have a problem with the two offices being merged? >> no. bill might feel differently on that. i've never seen it as any
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governance fiascos. sometimes if it is transitional as part of a succession, it's fine. you have the governance issue covered. >> i think my colleagues have yet to uncover research that shows separation leads to better performance. it all depends on the people. iger has done an outstanding job. you need a strong director. it's a fine line between lead director and board chair. >> royal dutch show they had separation of roles and it hardly did any good. >> interesting that we got some big names who are not going to be with us in the next five years, jeff. and the pressure to make those names and those successor names clearer is only going to grow. >> there's a lot -- these are great names. great part of this generation is with wonderful names there's a
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humility about the names you mentioned. without a lot of bravado that proceeded a lot of them. >> no matter how happy you are with a ceo, it's your job -- i serve on these boards -- to have people lined up to come along to take the job from internal. just talk to the new ceo of 3m. fully groomed. you need to be doing that. look at ibm. same thing. all of these people groomed internal successors. today that's the big change. it's not bringing in a rock star ceo from outside. grooming people from inside. >> spoken like a true director of exxon and goldman. bill, thank you very much. jeff, thanks to you. talk to you guys soon. keep those tweets coming as disney does deal with "john carter." instead of "john carter" disney should have invested a quarter million in blank because of blank. let us know. your responses right after this break. [ male announcer ] at scottrade,
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we talked about "john carter." what should they have spent money

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