vaca, but joe is off and becky, they're both off today. so you're stuck with me. and we're joined, though, by gary kaminsky and kelly epp, thank you for being here. we're talking about apple and what the company will likely say. but first, let's check on the global markets report for that. we head to london and of course our good friend ross westgate. mr. west gate. >> good morning, andrew. good to see you. european stocks, we hit eight month highs last week. highs for the year of course when it closed on friday. today just coming back a bit. we'll get the results of the cds auctions. you have to remember dax up over # 21% for the year. ftse 100 down about a third is where we stand. crucially we continue to see bond yields rising up a bit take in determine any. bunds trading around the all important technical 2% level, so

we'll keep our eyes on that. looks like probably going to get a weaker start handing over from here in europe to you. and actually talk about handing over, i've had enough of staying here in europe. what i want to do is come over to the states. and funny enough, it's easy to do. >> love this. >> what is wrong? >> i thought you were in london? was that not just there? >> yeah, that -- all the times that i've been -- >> welcome. tv magic. >> you can imagine sitting in joe's seat. great to have you today. >> joe couldn't make it? >> joe couldn't make it, so you flew over just for us. >> going to spend a week here. >> i think you're coming back later this week, too. >> i am. >> do you think we can pull that twice if the same week shall do you think tryou viewers would remember? >> the british accent alone adds levity.

>> don't be pulled in. we have exclusive news to break, as well. >> i like that tease. keep it going. let's spend -- >> and at that titake the jacke. those if you have a sweater, i would tell you to do it just almost to -- >> i thought about that last night. >> let's get back to the top story of the morning and it's a big one. apple of course today the world's most valuable company and it will discuss what plans to do with all of that cash, $98 billion worth of it. analysts say apple may meet demands to pay a dividend for the first time since 1995. tim cook recently said he had been thinking very deeply about investors' demands. the return could also be carried out through a share buy back. this this news came last night and a lot of people i think are going to be on that phone call waiting to find out what exactly

he's planning it to do. >> and apple's been in a really unique situation because almost every company that holds so much cash would have been penalized. but given the organic growth that they've been able to produce over the last several years, they've not been under the same sort of pressure that most other companies would have. they didn't need to do this. they did not have to do this, but it makes sense given where interest rates are, given what they're doing in terms of generating cash. the fact that if you look at -- at this point, one of the fallacies out there is that this idea that all these growth and income funds will start too pay lot apple. most of these funds have railroaded started already started to buy the stock for months essentially saying we want to own the name, the relative underperformers by not owning apple was so meaningful. >> a maturing company. >> typically, yes. and i sort of bite my tongue

every time we say it, but apple is a very unique situation. to be able to grow the top line the way they have at the size that they have and generate the cash that they have, it's a unique situation. >> so let's take bets around the table real quick. is it definitely a dividend or buy back? and then the question is how big. remember that two-thirds of the money is not in your hometown, but abroad. can't be brought back. so most of the estimates are that you're talking about the money that they're currently generating as opposed to the money already in the bank. >> who wants to go first? >> i'll go dividend. maybe a special dividend on top. >> i'll take it. >> i've taken an apple vow of silence for the morning. someone has to push back here. it's an apple world that we're all living in. >> so you're pushing back? >> i'm kidding. there's no way we can avoid talking about this, but -- >> we have given a lot of free

publicity. >> it is one of the biggest stories that we have right now. i don't think it's overcountry. it's just that it's mazing the way that they can come out with this announcement. it's what we'll be talking about all morning. we have news later this morning of the announcement itself. everyone seems to be speculating about a dividends. >> what's the chance it's nothing? what's the chance we're getting on the phone to explain to the world that we decided we would like to keep the catch in our coffers. >> i like that. not going to happen, but i like that. >> if you're a long term shareholder, the best thing they can do is announce a dividend. does not need to be the speculation maybe 2.5%, doesn't need to be that high. but about if they make the point that they can grow that dividend mid teens, in other words, this is where we'll start, and we'll grow it, that's the confidence that they're willing to say that they can grow that distribution.

>> what does the number need to be? >> i don't think -- big disappointment will be this idea that all these huge growth and income funds will start to pile this. we've asked many of emon the air wl whether or not they've started to buy and they have. >> on the line is tim cook's management of the company. it's one of the first moves that he's made at the reins. are investors comfortable with the way that this is announced so so? what's the reaction going to be. there's quite a bit on the line. >> and there is some sort of read through, as well, because how they say they came up with the decision, in other words, this is the reason why we're going to do a dividend versus a buy back. we'll have specific ramifications for other companies in terms of how they see the world because people follow up. and the "journal" did a piece,

small and mid cap funds on apple. >> there's who one left to buy. >> that's not true because -- >> still a lot of retail guys. >> being an asset class, one of the biggest things for those that manage money was those that chose pot to own that stock. the impact on your port follow was like being short the stock. >> but do they have to be perfect. look at what they are. >> that's why he never spent the money because he knew he had to be perfect. >> a little bit of deal news out this morning. u.p.s. will pay $6.9 billion to tnt. that's a 54% premium over the closing price. the dutch firm rejected the

original u.p.s. bid some four weeks ago. >> big deal, by the way. >> yeah. >> huge for u.p.s. in terms of size if europe. but let's get back to the markets this morning. the dow, s&p and nasdaq all gaining more than 2% last week. year to date, dow up 8%, the s&p up nearly 12% and the nasdaq ahead a stunning, are you forward this, 17%. i can't believe that. this all goes to this idea we talk about it meaning have you missed the train, if you still get on the train, are you too late, what happens. a few interesting economic reports of note this week that could move the markets, housing will be the big theme. tomorrow the government's report on housing starts and building permits. wednesday, existing home sales. thursday, jobless claims, the fhfa home price index.

and the leading indicators. and on friday, new home sales. >> let's take a look at the markets. there are equity markets other than apple. if we can look at the boards. sorkin fair value. down about 16 on the dow, s&p really more or less hugging the flat line. >> hugging the flat line. >> like a sports caster doing play by lay play. >> not a lot of movement in the energy complex, as well. some speculation that there would be some sort of geopolitical events over the week especially. didn't have much. and there it is, the yield on the ten year, 2.274. it was amazing to read all the headlines on friday afternoon. huge move up in terms of percentage on yields on the ten year. obviously when you're coming from one and a fraction, 30 basis points is 15%.

but those that look he correlation, kelly, you hear a lot about this, you mentioned 12% gain this year, if you you thought where would the ten year be on an s&p up 12%, you'd be printing something north of 3%. >> and this was the great diver againdiver divergence for a while. if you look at what the s&p has done relative to the ten year, there's still a gap there and speculation that it has to do with the fed, operation twist, what's happening in europe, with a lot of people changing what they buy. but typically that yield follows more or less growth. so if we're in a period where growth is 3%, then you would expect to be closer to 3%. but i think tells you the market broadly maybe doesn't totally buy that 3% is sustainable. if it appears more likely, then

that may still have room to go. but it seems after that big week, it's not too surprising to see a pull back. >> can joe make to 30%? >> was that his estimate? >> that's his estimate. >> at this rate, he would, but the question is this a sell in march and find your rhyme kind of moment. >> kevin ferry will be on later and it was actually, i don't know if you remember, and i'll give kevin a call out on on this, it was actually back in the paul when we were -- remember that day when we were looking he s&p, joe made that call, and ferry matt same call. i'll ask kevin about the correlation that we just talked about, why the bond market is not at least at this point completely in line with the equity markets. but joe will tell you that you he's almost wilthere. >> he is almost there. >> so many fund managers have hit their targets for the year.

what do you do when you've hit your targets in march? >> 12% is not a bad year. >> exactly. >> the question is what happens to those who weren't in to capture this and that's the real risk. no one can really pull out because there's a sense if you do, could you miss the next move. of course the risks seem skewed. >> and you see is it again today, the dollar is weaker. we got dollar trading with high yields and high stocks. >> one of the things again last week just on bring up in terms of while you were down if florida, the week where you have to have a weak currency to have a stronger equity market, i think it's 56% of the time, if you look at all of the performance of the s&p, the equity markets actually do better 56% of time when the dollar is stronger.

>> down in florida, a, they have news papers and, b, they have squawk playing everywhere. cnbc -- florida is cnbc country. you walk into the gyms, you walked joe and becky and you guys. >> i'm going town theing down w week in miami. >> nice. >> we have corporate headlines? >> starbucks will open the first store fresh juice bar chain today, the company's biggest move outside coffee. the first shop located in bellevue, washington. i need to know this, an upscale city just east of seattle. fresh and bottled juice and food. the menu will include vegan and vegetarian options. hopes it will boost the company's position in the health food sector. >> this is actually amazing stuff and the question is do they roll it out in to the other

star puck buckss or not. they sell it here actually in the cafeteria. the other kind -- >> seattle's best? >> no, the fruit juice. >> you're talking about the naked. >> they sell naked and her trying to replace naked with this other stuff. anyway, sorry. >> tea is for me. >> do you have tea on the and i believe? table? >> no, i had some earlier. dunn & bradstreet has suspend abouted operati suspended operations under allegations that data collection prices in beijing may violate pry sivacy laws. brazilian court barring several executives from leaving the company pending trinl charges that related to a high

profile oil spill. prosecutors are pressing for charges against both firms. they must turn in their passports to the place. a couple days ago, the brazilian navy spotted a thin stain of oil at the same site as last year's spill. chevron has halted proi eed pron the field. >> still to come, your national weather forecast. and plus spring training time, but the mets owners are step up to the plate in court today. details mess. >> big day in madoff land. >> first attention boss fans, bruce springsteen this atlanta last night. the wrecking ball tour will take the band lieu u.s. and europe, the bruce's first tour since the death of clarence clemens. squawk will be right back. carfirmation. only hertz gives you a carfirmation.

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u.s. u.s. equity futures that the hour looks like the dow would open down 24 and s&p off 3. making headlines, the mets owners will try to convince a jury that they didn't know better any madoff was operating a ponzi scheme. a jury will hear mets owners test pie about their relationship with madoff.

prosecutors say their friend ship with madoff helped them profit from his fraud. what a beautiful day that was. let's get to today's national forecast. alex wallace joins us from the weather channel. >> how is it going, guys? we're finding more of those warm conditions in the northeast, but we're also tracking storms across parts of the southern plains. we're dealing with severe thunderstorm watches out there for us this morning and line of storms racing through the region. could be damaging winds and shale with those storms approaching oklahoma city. so we'll be talking a zone of red from texas in to the upper midwest. damaging winds and hail the many threats, but we can't rule out tornado, particularly down in to texas including in and around dallas. meanwhile, that spring like warmth continues. we have a huge original owing in

the eastern half of the country keeping all take cooler air up in canada up in can made today. so we'll be dealing with temperatures 20, 30, in some cases 40 degrees above average. just unreal warmth out there. certainly going to be dealing with record highs once again. this continues in to tuesday, as well. even into the mid week, wednesday, we don't see any cooler air coming will if anytime soon. we have 80s all the way up into parts of the great lakes. so for those who love the spring warmth, an enjoyable next couple of days. still to come, a bite out of this morning's top story, apple set to announce plans for its cash stock pond. we'll talk to an analyst about the street's expectations.

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welcome back to welcome back to squawk. apple going to hold a special conference call at 9:00 a.m. eastern to talk about what it could possibly do with its nearly $100 billion cash pile, that is the big question morning . stephanie link is joining us on set and she runs jim cramer's charitable trust. we went around to get a betting line on what we'll hear at 9:00. everybody says dividend. you were going with a special dividend. where are you? >> dividend. imcook h tim cook has been saying for a while he's been focusing on the dividend and i think that's whan investors are looking for. kuwaits s equates to about $17 billion out a year. so they have ample billion. but $64 billion is overseas.

so they can do this, which would be positive and then they can still grow and expand oversea, which is what i think they really need to do. build stores and secure their supply chain. >> one issue gary raised was this idea that unless they announce nthat the differencvid grow, it doesn't equal a positive. >> for help to edge the position, it has to be growth in distribution and i would say somewhere in the mid teens. >> absolutely. and again, they have the cash. they'll generate something like $60 billion, $70 billion in cash over the next four quarters. so they can continue to grow it and more importantly, they have on continue to grow the business. the products are coming out, it's a great story. but they have to continue that momentum. >> steve jobs was always famously against this. so how do you think investors

react? >> again, i think investors are expecting 2% to 3 abou%. so i think over the long term they're doing the right hinge. it will generate incremental buyers. jpmorgan said 40% indexed to the russell 1,000 don't have apple holding. so you do have incremental buyers. >> good this buyer gets in, that's not to say that it's overvalued if you look at earnings, but there's a sense here again do we look back at this period about and say this is when that amazing growth sort of started to flatten out. >> and i would just say as long as earnings continue to go higher, it's all about earnings and earnings have continued to go higher.

analysts every day are raising estimates. >> doug kass points out when microsoft turned $70 billion of value to the shareholders, 2004, they had the special dividend, they announced the significance buy back, $30 billion worth of stock buy back, and then the stock was actually down after the announcement. the difference rearly lclearly apple grows much faster. >> we think thus far. sglt end market is much faster. pcs versus everything. >> the return to capital. but did you say sell on the news. do you think there is an anticipation that there will be some sort of sell on the news mentality? >> i think we could. we certainly could. the stocks rallied 100 points in five weeks. p so you have some of the buyers were actually anticipating this. but i don't think it's a long lasting sell on the news because

we have earnings going up, product cycle stories coming out. iphone5, itv. under job, they can't he witell might go. now hers at least telling us things. >> if they decide to say we're going to do everything, perfect use of cash, we'll do a buy back, pay dividend, and we actually may start to selectively look for acquisition, is there might go out there th anything out there that can move the needle for them? >> i think they should spend the money buy twitter and call it a day. no joke. because that is the way they can create the next facebook and they can do it all in your

handheld. i'm turning twitter into facebook effectively. basically i'm building it out. and i'm taken grating in to icloud. >> but i like it because it's twitter and not facebook. >> what would be the price of twitter right now? >> somewhere between $12 billion and $20 billion probably right now. maybe more. those are the kinds of things that you could do. we talked on the set about nuance, the provider of the voice to speech technology, which they license but not own. eventually you'd think they want to own that because google owns the other one. and without it, you're in trouble. >> look at the moves you talked about where it's going in terms of stock. we talked about it will deliver a perfect game. i mean, i just get worried, we're out of balance. and i get twitchy when we're out

of balance. 30% on the nasdaq 100. >> yeah, a lot that don't own it if you're looking at the russell and the 1,000 the benchmark. >> about if they split the stock and announce a dividends, not only do you get new mutual funds and institutional investors owning it, then you get retail. >> so now it gets interesting. how we're splitting the stock and we get a dividend. how about a buy back, too? >> i think a lot of people are expecting that over i'm. as mu time. >> does that make sense to you hat will type of praiice? >> it's still pretty cheap. >> mathematically a buy back will be a tremendous amount of

cash. this is like one of his biggest calls. >> i can bet you money that they won't announce further acquisition this morning. >> can i raise the political element. a lot of pressure of course on companies to spend. apple's had its own share of bad pr with regards to its overseas manufacturing operations. is there a sense in which we should be sense difference about how they talk about using their cash, is there a political risk? >> i think that's a debate for a lot of technology companies because most of them do have all the cash overseas. i think it's something to be aware of, but i don't think it's something that's really negative in the near term. >> stefani, thanks for coming in this morning. so dividends, maybe a little buy back and i like the idea of splitting the stock. >> and some m&a. >> mix it all together. we have other news this morning in political land. a win for mitt romney during the weekend if puerto rico of all places. now the candidates are preparing for tomorrow's primary in illinois.

and i will notice has more delegates at stake than any other state so far this year with the exception of georgia and our good friend john harwood is our chief washington correspondent and he has more. john, puerto rico, important, not so important? >> it's nice for mitt romney to get a win heading in to illinois. he picked smup delegates. he has a delegate lead which will be very difficult to overcome. but he needs to definitively stop rick santorum's know men it item with a win in illinois. and if santorum can interest some how break through there, hugh there's a new poll showing mitt romney's only four points ahead of rick santorum in a state that has been thought of as a home game for mitt romney. he needs to win. and if he does, he's going to continue an strengthen his grip on the nomination. but if santorum can break through and get that win in a

closely contested mid western state that he hasn't gotten in ohio, he didn't get in michigan, then we could have a little bit of a different ball game and some of the delegate math looks less compelling if santorum can really break through, consolidate that conservative vote. >> and there's a story in this morning's "washington post," headline obama struggles with big dodonors. when it comes on big donors, looks like obama has half the big donors that he had at the exact same time before he was president. he has only about 11,000 donors who paid more than $2,000. at this same time i guess we're talking five years ago, he had 23,000. what do we make of that, how important ultimately is that? >> i think a couple of things. first of all, you you may have noticed that he's made some people mad since he's been president. >> i heard about that. we hear about that sometimes on

this show. >> yes, absolutely. and he is sfesespecially a lot who can write big checks. and given economic conditions, it's been a poor fund-raising environment overall. so the republican field for example has raised and spent a good bit less money than the same republican field had in 2008. but i think it's principally sort of the bruises that you take when you're the president. and it's why he paces sufaces s competitive election, the polls tell us that republicans have a chance to win this thing and barack obama has got to really work for it. and we've seen in the last several weeks he's been hustling all over the country trying to do whatever he can to raise money. and he's going to have a lot of money. he'll have more money almost certainly than his republican opponent, but it's not just flying in over the transome.

that's probably impossible in this environment. >> john, what about the idea that andrew mentioned four years ago perhaps a lot of those donors are just waiting to see who he's going to be running against and then they get revved up and excited and maybe the apples to apples comparison -- sorry, guys -- is not really relevant here because it's -- there's not a game on so to speak. >> although increasingly i think people are deciding that the apple to apple comparison is obama to romney and remember, that romney has got a special connection, attraction, to a lot of the people in the financial world that barack obama did very well with in 2008, but they know that mitt romney comes out of that world, he understands their business. bain capital has ties with so many of those firms. so that will be an advantage pot republicans compared to what john mccain had. >> he has a completely entrenched organization.

>> i was talking to a former bush fund-raiser who is now raising money for mitt romney who said this is the best organized and the most efficient fund-raising operation i've seen. again, they're not raising the volume of money that some campaigns have in the past because of economic conditions, but they're very good at it, they have a deep bench in terms of high dollar donors and obama has fewer as a result. >> john, we have to run, but speaking about a deep bench, what about a shallow bench some are you okay with the duke early dismission al from the tournament? scl gary, i am not in any way okay with that. i'm not okay with you mentioning that. this is a source of pain in my heart. but you know what, we get the good times at duke basketball, we got to just suck it up when something truly awful and shocking happens like happened

on friday. better year next year. >> tar heels still alive. i know you're rooting for the tar heels how. >> yes, and i got to tell you, i like this carolina team even though i root against them when i play them and i'm very sorry that kendall marshall, this fantastic point guard they have, fractured his right wrist yesterday. i hope he can still lplay in th tournament. >> thanks, john. >> do you think in a week i'll get my head around the basketball? >> we'll send you down to d.c. and john will work with you you. >> if you don't catch march madness being here in the states this week -- >> the real question is can you explain cricket to us in a week. >> i can try. whether you understand it, i don't know. you're good students. i'm focusing on the golf, as well. we'll take a short break. still to come, questions about anything you see here, e-mail us squawk@cnbc.com. we'll take a quick break. the pictures from the futures pits in chicago next, but first, a bit of sports news. luke donald winning the

transitions championship in palm harbor florida yesterday. he now owns the number one world ranking once more. three brits have won the last three tournaments. if respect

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u.s. equity futures at this hour, we have red arrows. dow would be off about 26. you can look at our implied percentage open. making headlines this morning, gas prices continuing to climb. aaa says the national average

price for regular gasoline has reached $3.83 per gallon, up seven cents in the last week. i don't know these things. only jeeves knows these things. 28 cents higher than a year ago and within 28 cents of the all-time record high of $4.11 per gallon set in july 2008. jeeves takes care of the gas in the vehicle in the morning. >> andrew doesn't drive here. >> he has a jeeves. >> yes. >> does jeeves have his own credit car? >> he that high school a gas card and i think it's sent to my people and they take care of it. sfwh you' sf >> you're like the queen. she doesn't carry any cash. >> i carry zero. exactly. i don't think i should be compared to the queen. how about the prince? >> same deal, i guess. prince william probably doesn't carry anything. >> can i just mention briefly,

the average price of gasoline per gallon is over $4 in new york now. this happened mid week last week. >> are you a driver? >> no. but i sympathize are all of those who are because that's a lot of money. >> how long before it starts to come into consumer spending? >> it already has. clearly an impact on consumer sentiment. and that's more equal weighted p whereas consumer spending tends to be dominated by those spending more and less effected at first, when you cecsee see consumer sentiment steps back, i think we'll see more going forward. >> if you need to car pool, give me a call. >> thank you so much. now to the markets and as i mentioned, kevin ferry joining us from the cme. kevin, i learned a lot time ago on wall street, you they ever for get some of the great calls and you did join us as you know back in the fall when every strategist in the world said we

would break 1,000 on the s&p and if not to the day, called the bottom. so you've had a lot of credibility with me. where do we go from here? i haven't seen you in a while. what do you think about what we've seen he's first several weeks of 2012? >> thank you, gary. i guess maybe i should just quit while i'm ahead, right? one for 1,000. no, i think that our theme back then was things were going to kind of sort of work out and that's what we've got. so much trickier now. so i think that we saw some value buying come back about to the treasury complex and fixed income on friday, a little bit more overnight. i think that's very important because it will help stabilize what was really an onslaught of fixed income selling last week. and that's going to help keep the equity rally intact for now. so i see the risks shifting.

so far investment hot money has gone into oil, gold, platinum, zinc, things people are able to point to and just ratrade with some big story. we see the risks going into food stocks. all right coffee, sugar, palm oils. will starts to move into the wholesale food stuff market over the summertime, i think you're going to have a really, really rough summer. >> no doubt. kevin, this is kelly. just a quick question. we talked about libor. last week it moved up. there's a sense the market is finding new levels. what does it mean for the $350 a trillion derivatives complex? >> big story i think as you know is trying to follow it, it's imm day, so settlement 47 and a quarter this morning for libor. so it's a day to watch. but i do think that out of the sludge is emerging a new and

more accurate picture of what the market will be. what people have to realize or what we're trying to point out to people that are willing to listen is that the system now works in a completely different way than it did before. unsecuritized interbank lending. its neat a collateralized central bank counterpart i system. so it's kind of ironic that after a long -- when the system worked on interbank, it was a phony number. now we're getting i think a more accurate number and going forward, that could be an important metric. but you've got to see where you can fly the plane. right now it's an imaginary number. >> kevin, thanks very much. have a good week and we'll see you again soon. coming up, i'm going to be inviting ross, gary and kelly all to join me in the chairs for a little taste of squawk unplugged. stay tuned for that and a lot more right after the break. [ male announcer ] how can power consumption in china,

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we're in the chairs this morning, but none of these guys look like becky or -- somebody e-mailed in, someone said, becky, keep me in check thinking you were becky this morning. i think they were a little tired, they weren't -- >> time for some coffee. >> they just want to make sure you're kept in check. >> someone's got to keep me in check. a lot of interesting stories in papers and magazines this morning. one that caught my eye, mike dacey getting in a little bit of trouble. he put on a play about steve jobs. we've been talking about apple all morning. he put on a play but then went on npr "this american life" and told this story of going to china and foxcon and found out he was made a lot of it up, taking it from newspapers and pretending he he had experienced himself. a big artle david carr and "new

york times" reporting on that. >> you have to credit the way they've handled it. >> now the question is whether that turns the narrative the other way to where people start asking thee questions about which better represents truth. obviously he misrepresented the material. >> he says it's a dramatic truth. and i went to the play. great play by the way -- >> dramatic truth? >> not necessarily journalism. >> i don't think we could get away with that. >> when we were produce oug too big to fail" as a movie, a lot of the discussion was does this get at the essence, at the truth? >> now he wanted to go -- >> no no, what do you got for us? >> the journal here today on jefferies, you know, sean egan made a lot of great calls after the crisis. what we had on jefferies is clearly not happening. egan is mentioned here saying

jefferies has done the right thing. if you bought the stock when the mf global was front and center, it was a great opportunity. the headline is jefferies on the upswing so surviving. >> you're trying to say our good friend egan not such a great call. >> not a great call. but his point is they did go and sell a lot of the assets after he talked about the leverage. jefferies, who was adamant that management, it was sort of like calling fire in the movie theater not happening. a good time to have bought it. >> are you reading mike taibe? >> matt tiebi? >> when we got that big bank settlement, president obama had a news conference, perhaps not a catalyst mortgage big rally we've seen, i'm not sure we've

put this behind us. here's the piece on bank of market, he who called goldman sachs the vampire squid. it is laced with profanity so don't zoom in too quickly. this piece talks about and matt's kind of railing about the how' bank foreclosure settlement didn't do anything it was represented to do in terms of penalizing banks for the misdoings. we started to see more and more people focusing on just how much banks have to pay for all, this how how much they can write down their backed securities. so in "rolling stone ou "it's a good place to look and say how can you turn broad attitude in america, not just the specific attitude of mbs investors against, this might be an example. >> we used to be frightened

about cbss. the ft has an interview with the greek prime minister. as you would expect, he's still pretty much toeing the line. he's saying they will try to implement performs. no one believes him. >> it's unlikely they'll be able to do everything right. >> coming up, we've got the nearly $100 billion question of the morning, what's apple going to do with all that cash? plus we'll welcome our guest host. "squawk" is coming back with a very big two hours. 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.

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politics and policy. politics and policy. harold ford is our guest host. >> mastering the market. bob dole with a strategy for success and how to add profit to your portfolio. >> credibility problem. find out in the latest edition of the cnbc's fed survey as the second hour of "squawk box" starts right now. ♪ bennie and the jets good morning. welcome to squawk here on cnbc. our good friend joe and becs are out today. i come, they go. it's all very confusing.

we've got headlines this morning. check out shares of apple. the company has scheduled a 9:00 a.m. eastern conference call to discuss calls for its $98 billion cash hoard. we've going to continue talking about it all morning. also this morning the housing market a major theme for the markets this week. today we're going to get the latest reading on the home builder sentiment with economists expecting a small improvement. also ahead this week, fresh readings on housing starts and credit on greek defaults. how much they'll be paid be. isda has determined the greek debt restructuring.

right now we've got red arrows across the board. nasdaq is looking up. there you can see it in the implied percentage open, which i'm starting to find is not confusing but it's less dramatic than when apple -- >> and certainly up like 3% premarket. which may help explain what's going on. >> which means our good friend doug cass may be wrong that you're going to sell on the news. >> this may be the last little fit of buying. >> or this may be a dramatically different situation from microsoft 2004. stay tuned, we'll see. >> does ben bernanke have a credibility problem? according to the most recent fed survey, he just might. a senior economics reporter joins us. steve, i did not write that about ben bernanke having a credibility problem. >> i did, don't worry about it. >> what we're showing on our

cnbc fed survey is a shift. when it comes to monetary policy, the market is increasingly not believing the promises that fed chairman ben bernanke has made. will the fed keep rates exceptionally low through 2014? only 40% of our 67 respondents say yes, 57% say no, 3% not paying attention, they don't know. they are unsure on the issue of is the fed's current monetary policy too accommodative, just right or too restrictive. take a look at january. 37% said it was too accommodative, 47% said it was just right. let's look at the change. 53% say it's too easy, 38% say it's just right. half of these guys are economists. will will be more quantitative

easing? it's up 19 percent and points to 63% saying no, 33% saying yes. of those who think it's coming? what month will it come? 45% say no. how much qe will there be? that number has come down, too. it was $567 billion expected in the month of january. now it's come down. you can see 450 billion is now expected. finally, what will the fed do -- what else can the fed do to drive down long-term interest rates? extend operator twist, 11% said reduce interest on excess reserves and 43% said don't do anything. one person said buy mortgage backed securities, the other said no more, please, no more qe. that was a lot of the comments we got. i'll be back at 8 with the

changed economic outlook. andrew? >> thanks so much for that. we've got five term tennessee congressman turned businessman harold ford, jr. is with us for the next two hours. a good friend of mine. current managing director of morgan stanley. welcome back to the show this morning. >> good to be here. >> reading "the washington post" this morning. there's a story here, we talked to john harwood about it earlier, obama struggles with big donors, finding that donors that are pledging over $2,000, that at this time before the election last time he had 23,000 of these donors. now he has only 11,000 of these donors. what do you make of that? >> probably a few things. first of all, good to be here and i'm glad to be here with this crew. tell joe and becky they're missing out and better watch out. the economy is in a different state it was a few years ago. two, there are a number of people who believed the president would be able to transform politics.

the number of people in in a group three, four years ago who had never given that amount before. this may be their second or third time only ever giving. there may be disappointment in the president in the way he's conducted matters in the white house and the way he's led. as you know, presidential races are about choices and eventually we'll have a clear choice on the republican side and one on the democratic side. the way the republicans have muddled through this republican primary, which i think helps them in the long run, i don't think it hurts them as bad as some of my democratic friends believe, largely because there's such a focus on the republican primary and a focus on the issues they're raising. by and large people are more concerned with the prevailing issue, which is the economy and how they're doing around their own kitchen table. if i were the president, i wouldn't be too awilarmed by th number, but i wouldn't brush it off. >> you work on wall street. are any of your colleagues turning one way or another? two, three months ago it was

romney all the time. now there seems to be discussion at least about obama. i was just down in florida last week on vacation and it was shocking for a state that, you know, could be one of those states that determines what ultimately happens i met republicans who were turning democrat and it was crazy and then i met some democrats who were obviously turning the other way. >> i think it's still early. to answer the first part of your question, on wall street the money is far more important than the votes are. mainstream america, main street in america is where the votes will be decided. you continue to hear angst and anxiety and people who are working, but their wages are down and there's concern going forward about what it means. about what this recovery means, whether or not gas prices and other things will stall it. if i were the president, i'd do two things. i'd get behind something like

simpson bowles. >> i meet all kinds of business people who say simpson-bowles. i'm not sure they've read it. when you read it, it's tough medicine, no matter what side of the aisle you're on. >> i think what people like is it calls for sacrifices on the entitlement side and calls for tax increases and they're all enforceable. the republicans' main objection is if you raise taxes now and don't enforce spending cuts, all we'll have are tax increases. and democrats are concerned if you don't do spending cuts, you won't get tax increases. everyone understands it going to take a broad, serious sacrifice on the part of everyone to get it done. >> you mentioned energy policy. you have an op-ed where you defend president obama, cite middle east factors that's been a contributing issue for oil prices but at the end you say the president does need to get on board with the keystone, do

things to encourage energy development. >> that was my second piece. i think simpson-bowles first and, two, i think he has to get -- the white house has to be more willing to choose from a menu of options. the menu they choose from is only the green energy and alternative energy, which is very, very important and we've made great strides over the last three years with this president but the reality is -- >> that's an ipad, so that the audience knows what that is. >> i started hearing voices. >> i know. >> i thought joe was talking in the background. >> finish up your point. i apologize. >> we have to choose from a menu of options. the options speak to the keystone pipeline, which i think is critical, not only for us to continue to -- for the flow of

creation jobs and other economic activity. >> a real mistakes you say the president how he approached it, the keystone pipeline? >> the state department signaled support for it. i think the president caved in to more extreme voices in our party, which i think is wrong. >> we're going to take a break. >> and a call to fix the housing problem or step aside. we'll speak to him right after the break. how can you just stand there?

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the house oversight committee is taking its hearing on the road this morning. members are in brooklyn, new york addressing the housing crisis and what the fhfa needs to do to provide relief to homeowners. here with a preview, elijah cummings, ranking member of the oversight committee. good morning, congressman. thank you for being with us. >> good morning. >> you effectively are trying to push the head of the fhfa to resign should he not change his position and try to help

homeowners. is that a fair way to think about what the role of the fhfa should be? >> well, it's his job. it's his job to help homeowners and it's his job to help taxpayers as the conservator base clf i freddie and fannie. we did not come to this conclusion lightly. i've had at least three meetings with mr. demarco. members of congress, some 18 or 19 of us have asked them to move forward with regard to some reforms that would be helpful, like such as principal wright down. while he said he didn't have the authority, we showed him he had the authority. then he changed and basically said he wouldn't do it. so all we're saying is that we think that's what will bring maximum benefit, not only to homeowners but also to taxpayers. >> good morning, congressman. your old friend and colleague

harold ford. i hope you're well. good to see you in new york. >> good to see you. >> you were explaining interest and i hope you elaborate a bit your position. there may be some in the business community that might not understand why you're asking a regulator to resign because he doesn't agree with you. your point around housing is he has this responsibility and this role and he's not fulfilling it. what has his response been to this and where do you see this going here in the next two weeks as you get closer to a decision around what he does or what he doesn't do? >> well, basically keep in mind we met with mr. demarco a number of times and his initial response, again, was that he didn't have the authority to write down principal. and what i think has frustrated us most is that he has basically done what i call a rope-a-dope on us. he would come into a meeting and say i'm going to try and do some things to help, help all of these 3.7 million people who

stand in the way of possibly being foreclosed upon. then the next thing you know he comes back with some lightweight proposals, the kind of proposals that help very few of these homeowners. and basically then we sent him a letter recently harold where a whistleblower had come to us and said, look, you've had -- they had a principal writedown proposal in 2010 this they were about to launch but based upon philosophical differences, quote unquote, they decided to pull it back. obviously they were prepared to move forward with such a proposal. it's our belief a principal reduction program would keep people in their houses, allow them to make mortgage payments and we -- save communities, save the tax bases of various states and cities and would be better than fannie and freddie allowing

these folks to be foreclosed upon. also keep in mind that the attorney general's recent settlement is one which has principal reduction as a part of it and those attorney generals are both republicans and democrats. and obviously they came to the conclusion that it was a good thing. but when they asked mr. demarco to include fannie and freddie housing in it, he said no. and so keep in mind, too, that 60% of all the mortgages are under freddie and fannie. we just think he could do better. we don't think that he has been always candid with us and that concerns us also. >> congressman, good morning. let me touch another topic with you. the op-ed last week written by vice president goldman sax, very public in terms of his resignation, you opted to put out a press release after that

op-ed essentially saying this is what's wrong with wall street, many of the same things continue. why did you put that press release out? obviously you've got tom strong thoughts on it. why do you that? >> well, again, you got keep in mind i've been fighting this fight for a long time. and this is a -- we had as the press piece said, we have bailed out these kinds of organizations to the tunes of billions of dollars and it seems -- and it's my firm belief just based upon what we found out in the oversight and government reform committee and the research that we've done in listening to the various folks that have investigated all of this that there's probably a lot of truth to what the young man said what he wrote his op-ed piece. and i was just saying that we have got to make sure that we move back to what he said. we've got to have high ethics because our people, that is those people who are involved in

the market, deserve to have the very, very best representation and representation that is for not only for the benefit of the company but mainly for the benefit of those who seek to engage. >> congressman, i just want to go back to the fha. is there any time when the regulator should -- you regard his job as to keep people in their homes. when should the regulator not be doing that job? >> well, i think that clearly he's -- i think that's his job period. i think he has to also by the way -- >> but is there any point at which point actually that is not the job, when actually they do need to foreclose? >> there are times where they need to foreclose but you got to understand that we are only the regulator right now is only touching a fraction of the housing and keep in mind that

we're talking about of 60% of all mortgages coming under freddie and fannie. that's what concerns me. i have not seen enough action on the part of mr. demarco. he could do better. i'm not saying there's certain people that maybe they went into these deals with expectations that were very unreasonable, not being foreclosed upon. but you got to keep in mind that a lot of these people, as a matter of fact quite a few, are folks who through no fault of their own have seen themselves go underwater. it wasn't their fault. it's basically the way the economy is, people have lost their jobs. and, by the way, foreclosures are up, therefore property values go down, therefore neighborhoods go down, therefore we have folks underwater. so we can do better. our country is better than that. romney has said basically let the market bottom out. well, there are people who are looking at this program right now who are saying, look, you

saved the banks, you lifted them up, we're drowning, help us. >> congressman, we're going to have to leave it right there. thank you for joining us. good luck with the hearings today. coming up, we're going to take a look at what's cooking at apple. the company making plans for its nearly $100 million cash hoard. squawk is coming back right after the break. [ male announcer ] this is the network -- a living, breathing intelligence

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it's not stocks to watch today, it's the stock to watch this morning. obviously apple, the company holding a special conference call at 9:00 a.m. concerning its nearly $100 billion of cash they have on the books. the fact they have this cash part of the story, the fact they're going to generate so much cash in the years ahead, obviously the second derivative here. andrew, we've short of bandied about what we think -- you sort of did not give us your absolute call. what is your expectations?

>> it's going to be a boring dividend. my worry is that this is microsoft. that would be my call. if you want an interesting call, i think the doug cass e-mail that came in earlier this morning, that somehow when you acknowledge this is the moment and that's what happened with the microsoft, that maybe we're coming to a top on this whole situation. >> harold, if you're on the board of apple and had to think about what to do here, you've obviously had the experience now working in the investment business, being in politics, what's the right decision for this company and their cash? >> they need to find the best way to deploy it. a dividend payment probably makes sense. i'd agree with andrew to an extent that they have to be careful with how the market will view -- obviously steve jobs his passing, cook trying to run the place in a way that inspires confidence, i would err on the

side of taking care of investors. >> that's been the deal all along. people have been saying it makes sense to doing this, why aren't you doing this? steve jobs was against it. people for years have been saying this makes sense but the timing of it, doing it now, how people are going to interpret it, et cetera. >> it's very important. many people that own the stoke that actually work in the business were not around in the late 80s, early 90s to remember what happened when this company was run by gilliam and mike spinnedler. this was a company when steve jobs came back, the fact they could have any cash and in fact ever generate cash, that was a very important mindset. many believe the fact they generated all this cash and kept it was part of the culture. there's a school of thought that this changes the culture. returning capital was not what this company is about. >> is there a timing issue where a company like apple says now is the time do this and to sort of

think about how rules and regulations are changing with regards to how and where people are able to keep cash oversee se -- overseas? >> sure. who knows if mr. jobs was not a part of the conversation over the last 20 months. i trust this board. this board has made a lot of smart decisions. they realize this is a big one and i'm sure they're factoring in what andrew has said. >> wall street gets a status update from facebook. >> and a jury will decide if the mets have to pay millions to compensate victims of bernie madoff's ponzi scheme. we'll have a closer look as squawk balk continues right here. still to come, squawk gets a

trifecta. their big bets on the markets and what's 'round the bend. one show, three market masters, only on "squawk box" on cnbc.

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welcome back to "squawk box" on this monday morning. gop front-runner mitt romney picked up 20 more delegates over the weekend by winning puerto rico's primary. this week, key contests in illinois and louisiana. and tnt buying tnt express. the deal makes ups the biggest shipper of packages in all of europe. >> that's a big deal. >> it's a very big deal. >> it's a big deal in europe as well. u.s. stocks staging an impressive comeback. the s&p topping 1,400 for the first time in almost four years. is it time to takes profits and reduce exposure? joining us, bob doll.

good to see you this morning. we're looking for a slightly softer opening. we got major gains across global equity markets in germany, the dax up 21%. do you stick with it or take money off the table? >> i think you stick with it. i don't find a whole lot of investors who are so overweight equities to take money off the table. now with fixed income going the wrong direction, some of that money will find its way into equities. we're in a pretty good sweet spot right here. moderate economic growth, inflation is low, aggressive monetary policy, valuations hardly stretched. my guess is while the pace my slow, we'll grind higher. >> the thing here is it seems to be predicated on one thing. slowing growth in europe, slowing growth in china, brazil, elsewhere around the world. it seems to be predicated on both in the u.s. holding up.

plus, we have a stack load of liquidity out from global central bank, from the g-4 central bank. >> won't deny any of that. maybe what i would add to the equation is the fear premium, the crisis premium. we're still unwinding the most amazing amount of fear that investors had certainly in my investment career when you can buy ten-year treasuries and s&p 500 to the same-year-old, that means people are scared and we're unwinding that fear premium. in is not a year of economic or earnings growth, it's a year of revaluation of multiples. >> good morning, it's gary. help me with the story of the day. you're in a position to know fact from fiction. apple announce as dividend. portfolio managers, is there so much money they're going to pull the trigger, the announcement, the minute that happens? >> i think, gary, that as you

know there are some funds that can't own stocks unless there's a dividend. some of them will do some buying. it's a big benchmark position. my guess is some will buy it. i don't think a lot of people knew that in advance, not that the dividend was coming today necessarily but you get my point. so apple's had a big run. some it have is on the back of the massive free cash flow, the amount of cash on the balance sheet and the inevitable they'll give as you dividend. >> do investors expect the dividend rate, as opposed to president obama's budget go up to the personal income tax rate in 2013 meaning it could potentially for the highest earnings triple? is that a baseline assumption at this point of yours? >> i don't think so. look, that's what he's proposed but he'll need a democratic congress to have a chance at that and our guess is the house at least remains republicans, making the probability of a tripling of the dividend tax

zero. but there could be some scary moments in the market has we contemplate that. dividend rate going up most likely, triple, likely not. >> is there a chance of them going up now? >> i think it's unrelated to the current situation. it's more about i've got a lot of cash, i have a lot of cash flow, i'm going to give it back to the shareholders. >> bob, you talk about a rerating of multiples to the market. we've got rising gas prices. i wonder what impact that will have on the first quarterin earnings? >> it is an issue. it's only half of last year to the low of arab spring high. i think we have more before we have a lot to worry about but you're right to keep your eye on it. it could be a fly in the

ointment for profit margins for those kinds of companies. the other side is there are a lot of beneficiaries, like the energy companies. >> a lot of asset managers have switched out of fixed income and treasuries and made a strategic move to equities. what more pressure will that have on treasury yields? >> i think that move has barely begun. we still know the risk premium is favoring equities and against fixed income. i think those asset al owe caters will probably do more. what's it going to cost americans to buy stocks? my answer has been higher equity price, we've seen that, and lower bond prices. they need to see losses in their bonds. maybe we're seeing some of that now. >> bob, in terms of equities, it's been a unique year. most outperforming the benchmark, the etfs. is that something that you think can continue? you and i both know a lot of active managers are hoping that's the case.

>> you got that right, gary. there's no question -- look, the cause of it as you well know is a decline in volatility and more importantly a decline in correlations. over the last couple years we had some of the opposite, is he high correlation, very high volatility. we are in the environment to the extent it continues where that's also wind at the back of stock pickers. >> bob, thanks for joining us this morning. >> bob doll joining us. still to come, an update from facebook. analysts are invited to a pr pre-ipo briefing. and the mets' owner is heading to court today. how much did he know about bernie madoff's ponzi scheme? that and much more when squawk continues. paperless discount. paid-in-full discount.

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♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ let's just let's just see where we are as far as the opener is concerned. just looking a little down. pretty flat for the s&p 500. i love andrew's -- we now do this in europe, andrew. >> but you don't have the trademark over there.

copyright issues there. >> should i have asked you personally before i said we could use it? >> you guys are like china, just stealing stuff. >> we have a few interesting economic reports this week. housing is the big thing. today the national association of home builders releases its housing index for march. tomorrow the government's report on housing starts and building permits and wednesday existing home sales, thursday jobless claims, the fhfa home index and friday new home sales. big week for the housing guys. >> and we've got news today. facebook has been summoning research analysts from its headquartersing for a pre-ipo briefing today. kayla? >> you say the word facebook and it's news. this is a pretty run of the mill meeting starting at 8:00 a.m. pacific time. we're expecting a lineup of speakers that will run the gamut of all the executives as well as

the heads of facebook's big products groups. we're expecting big attendance from each of the 31 underwriting banks. it's not just a meeting for research analyst, they're also letting bankers come from each bank to allow the company to streamline this town hall style meet so long they don't have to hold it twice, once for the research side and once for the banking side. we know these are usually separated by a chinese wall. interesting to note they're not actually allowed to talk to each other at the meeting. any of their conversations have to be brokered by a lawyer but they are allowed to ask questions. the big question of course being will they offer forward looking guidance. >> logistically that sounds like a nightmare. >> it's an idealistic might mayor they can't talk to each other. you're leaving the building, i'm sure a couple questions will get asked. >> no investors? >> no investors will be there. the hot questions, which investors will be there? will they give guidance?

they -- the dutch company said you can't give any sort of leg up because they will have access to the analysts. >> no analysts can issue guidance pre-ipo anyway. >> no. >> the bankers -- >> the bankers i understand. >> they need to help put together a sales memorandum. the emphasis is help. >> the analysts aren't supposed to be helping on that part. >> that's right. >> that's what spitzers always wanted, right? >> facebook is in the registration period, correct? >> that's correct. >> in theory with the s.e.c. guidelines about being in registration, this meeting theoretically should it not be open and online and open to

anybody who wants to watch? >> it should be. the road show is always posted online. the s.e.c. is obviously going to be cracking down on facebook throughout this period. you can be sure they won't be doing anything that is not exactly as it should be. anybody who is going to walk through the doors of facebook will be handed an nda and expected to sign it. nothing discussed in that meeting will ever come out of that building unless we as journalists can do a good job. >> i find it problematic. >> would you be surprised if we don't hear in two days -- >> i think kayla is such a good reporter, we may here about it on ou power lunch." >> one of the things that hasn't come out is the concerns s.e.c. has raised. if you have analysts in the room, especially concerns around groupon's creative accounting last year, a lot of questions will be put to facebook on that

same thing, especially as far as what other concerns the s.e.c. has had. our reporting has shown the s.e.c. did want a more detailed breakdown of their revenue stream including geographical revenue, how they calculated the fair value of their shares, the most recent was $29.73. that was the end of 2011 and how they calculated their user base. one interesting nugget was approximately 5% to 6% of monthly average users were false accounts, false identities. the s.e.c. is say can go you really sell this to advertisers when these people don't even exist and they're probably doing some sort of -- >> it's a big deal coming up for these guys in europe. europe is pushing if we hand out any data to third parties, you'll have to ask for their permission. still to come, the trustee recovering money for bernie madoff investors squaring off

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the trustee recovering money for bernie madoff victims is seeking $380 million from fred wilpon and the mets.

d-ro, good morning. >> on one side you have irving picard who say that mets owners saul katz and fred wilpon knew about the scheme, that they ignored all the warnings. on the other side the two mets owners saying despite their relationship that they did not know anything about the ponzi scheme. at stake, as you said, is $383 million. the principal is really what's at sake, $380 million, which is over two years. the mets owners must pay picard a portion of the $83.3 million that they made in fictitious profits over those two years. the mets owners are charged with proving that they were not willfully blind to the fraud and they're expected to call dodgers hall of famer sandy koufax to the stand. it was wilpon who got koufax to invest with madoff.

madoff has harrington on his side, who supposedly cold katz that the returns were too good to be true. madoff returns were used to fund wilpon and katz' 401(k) program for their real estate company they own. picard alleges the mets owners used guarantee madoff return to earn more when deferring player compensation or to avoid playing disability policy premiums. steve phillips once admitted in the 13 years he was with the team, he heard madoff's team every single week but picard has yet to demonstrate a clear red flag and many wonder if he'll produce that. madoff told the "new york times" if you're going to trust him that the mets own deers did not know of the fraud.

there still could be a s settlement in the next couple hours. the mets owners raised some money, seven investors, six of them were from themselves and one was stevie cohen,s hedge fund mogul, the leading bidder for the dodgers in is complicated going on. >> darren, you mentioned the financing and the insiders as well as katz and wilpon themselves and stevie cohen. is that financing closed? do they have enough money raised in that recapitalization to at least pay off major league baseball what they have to give them before the season starts? >> yes. there does not believe to be any funding problems with the mets immediately. remember that frank mccourt through the bankruptcy court had to give up the dodgers but

because of supposedly a relationship between bud selig, the major league baseball commissioner and the wilpon, the mets did haven't that situation, even though they bored $25 million from major league baseball. it doesn't look like payroll problems but there has been speculation, including in the "new york times" today, that a settlement could allow them to still be owners, whereas if they have to give $383 million, that could be the end of the line for them, versus maybe a settlement, cut it in half, do $150 million. obviously over the next couple of hours we'll find out if that's the case or if they're going to go to trial. >> you brought up an interesting point to those not in the new york market. a lot of true die hard mets fans want to see the wilpon/katz family lose this trial because they connect that with something with changing the baseball team. >> well, yeah. although fred wilpon has

consistently said this does not affect him, clearly we've had many off seasons where the mets really haven't acted as they once did, you know, certainly not the yankees but a power player in the marketplace. that money clearly is not there. so you got to think the only way you're going to get a turnover if you're a mets fan is for them to lose out. i know that's what many mets fans are hoping for. >> i'm trying to explain to ross here during the break about what march madness is, why it's so important in this country. any surprises from what you saw over the weekend? >> sure. ross, welcome to our country, by the way. the key thing you have to know is the reason why this is so great, why march madness is so great, if you think about european soccer or football, as you call it, think about black pool, blackpool beating manchester united. that happens in the ncaa

tournament when you have norfolk state getting through or lee high beating duke. >> it's straight knockout, right? and that's the exciting thing. >> right. so it is like the f.a. cup. it's the same thing but it's like having a team all the way at the bottom who had just come up from relegation and they have a chance to beat everyone else and that lee high makes $27 million less than duke on their basketball program and they still beat them. by the way, president obama out of the 6.45 million brackets on espn.com, president obama is in the 98 th percentile in his bracket. >> do du explain it to the prime minister when he went to watch the game with the prime minister? >> basketball's a little easier to get than cricket, i think. i don't know what a century is. i have no idea.

>> it's a hundred. >> darren, have fun covering that trial today and make sure you behave yourself in that courtroom, all right? >> i have no blackberry so i can't tweet. enjoy not getting any tweets from me, gary. >> you got it. >> coming up, squawk market masters unite. pimco's neel kashkari and jim o'neill will tell us where to put your money to work and former governor of new hampshire john john sununu will handy company the race after the break when "squawk" returns. tomorrow, our guest host is a titan of real estate. richard lefrak will join us for two hours.

and house budget committee chairman paul ryan will join us. and it's trump tuesday. a no holds barred interview with the donald. spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

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a double dose of squawk masters. this hour neel kashkari. >> and jim o'neill of goldman sachs. >> and former new hampshire governor and romney supporter john sununu and the latest on the race for the gop nomination. the third hour of "squawk box" starts right now. welcome back to "squawk box." i'm andrew sorkin. joining us, gary kaminsky, kelly evans and visiting us from london, ross westgate.

plus we have harold ford. we have a full house. its very good thing. u.s. equity futures at this hour, you're going to look there. the nas -- >> the nas? >> i'm trying to act like gary would. what did you say, hugging the -- >> hugging the flat line. >> dow jones looks like it will open marginally lower. a new forecast says 90% of forecasters don't believe the federal reserve will wait until 2014 to raise interest rates, among the reasons, an improving economy and concerns of inflation. and holders of greek debt default swaps will find out how much they're going to be paid on the $3.2 billion of outstanding cds contracts. isda has already determined it constituted a, quote, credit

event. most are expected it to rule the tolders are entitled to about $2.5 billion in reimbursement. european equities at this hour, you can see, ross, back home does this feel good to you? not so great but not so horrible either? >> we've been at eight-month highs, no surprise to see a little weakness. >> and how do you feel about the euro? i'm going to be in paris in about a month? >> euro dollar trading in really tight ranges. >> thank you for that commentary. and apple will discuss what it plans to do with its $98 billion cash hoard on a 9 a.m. cash call. they may meet demands to pay a dividend for the first time since 1995. courtney reagan joins us with more. >> the end of 2011, the tech behemoth, more than any nonfinancial corporation nearly

double what microsoft has on its books at $57.7 billion. so according to moody's, apples cash pile cultures for 8% of the total $1.24 trillion in u.s. non-financial corporate cash holdings. quite a percentage. steve jobs was famously opposed to dividends and close lipped about apple's plans for the cash. but under tim cook's leadership, oppenheimer said in january i would characterize our discussion today about active as what makes the most sense to do with the cash balance. last month cook noted serious discussions regarding what to do with the cash. today could be the day we find out. apple shares have increased 37% since oppenheimer made that statement and 45% so far this year making apple the world's most valuable company with a $546 billion market cap. how about them apples. there is speculation about how they'll spend the cash from

acquisitions, new technologies, buying back share. most analysts expect the company to announce a dividend for the first time in 17 years. of the top five cash rich u.s. financial corporations, they regularly pay dividends. google and apple do not. if apple does issue dividends, more will buy shares, though many have already done so in anticipation of this dividend. analyst estimates range from a special one-time payment to regular dividends between $10 and $17.57 annually, considerably higher than the company's last dividend payment in december 1995 of just 12 cents per share. while a dividend payment may be faef favored by investors, two third of their cash is offshore and they'll patriot hefty tax toes repatriate that cash. >> guys, i'll say this, if they

do announce this dividend at 9:00, the most important thing a half hour after that announcement is did they announce or give guidance on distribution growth. i will tell you now if it's just a dividend ash one-time dividend or a dividend without any kind of guidance, going to what you said, mr. sorkin, in terms of seller news disappointment, if they don't give distribution with growth, that will be disappointing. >> shares, by the way, are fluctuating up and down over the 600 level in premarket trading. we saw it up, now it's pulled back a little up. keep an eye on that number. >> a lot of excitement and anticipation. >> going to hold to you that, gary. >> of course will you. >> harold ford, jr., our guest and you know, there's so many things we can touch. you've had the experience as we

mentioned earlier of being in washington and working on wall street. you've got this unique perspective. we heard ef alija cummings earlier say things haven't changed on wall street, this perception with dodd-franks, or sarbanes-oxley, i'd love to hear your perspective whether or not we have the right recipe for a healthy capital market but a regulated capital markets? >> we're probably not at the exact right balance. you can't fault washington or congress for responding to adverse conditions on wall street that affect main street. understanding, first off, that most in washington don't have a full understanding of how capital markets work, how the financial services industry works. as a matter of fact, they're a glimpse into it and their reaction to it is generally that, when something goes really wrong or really well. to elijah cummings, i'm

impressed with his desire to get something done on behalf of homeowners who are hurting. when it comes to tarp of the $225 billion loaned to the bank, that money has been paid back, the larger banks and institutions have. i think there's frustration across the board in the political circles locally as we look at challenges that states and municipalities are having and at the federal level as congressmen and senators have to go home and face reelection and the back drop of a presidential race, i think more people are concerned about the economy and gas prices and job security and health care. i think in the next few weeks we'll see some clarification. one, because the court will take up the health care law, obama's health care law and determine the constitutionality of the mandate and we'll have another huge conversation around regulations and they'll take up

voting rights, affirmative action and immigration, which obviously will color this race even more. as you head into the fall, whom ever the republicans nominate and i still think it will be romney, the white house is bracing for that, the conversation will return to what it always returns to, the economy, how we're performing, debt, whether or not the president ran up too much and what republicans will do differently and i think the big conversation for the country and voters will have to decide is what role government will play in their lives. i'm 41 years old. this presidential race will be the biggest in my lifetime for one reason. these two candidates will have very, very if not starkly different visions for governments in our lives going forward. the country will have a big choice to make. i hope it's a smart republican, someone who will focus on big issues. if this campaign is bogged down in social issues and things not on the minds of business people and how we create jobs and make america stronger, i think we all lose out. if it's about health care, entitlements, energy, education, i think we all win.

>> i don't want to talk about the goldman op-ed but you still think a lot of people out there continue to have this belief that the system has not healed itself and been fixed. again, without speaking specifically about this op-ed, what is that -- what is the impact that's going to have on this election is it. >> i think these words will come back, this young man that wrote this op-ed. his words will come back in the form of some political commercials across the country and members of congress and the senate whom have been supportive of efforts to try to root out of of the the things that have happened in the last few years to repair the system, strengthen it. i think tarp was the right decision. i think there are those who will be criticized for it. in the last few days rick santorum as recently as yesterday criticized both president obama and governor romney for their support for investing in our financial

services industry. so that issue will come back and i wouldn't be surprised if indeed this young man's comments were and his writings found their way back into the political narrative. having said that, a healing economy, gas prices that stabilize and a government that gets our debt in order will alleviate the impact of some of those words. the most important thing will be an improved employment mark for every day americans across the country. >> would you have voted for dodd-frank? >> i likely would have voted for dodd-frank. i would have wanted and in light of where we are today, i had some issues with the durbin amendment and i still do and have some concerns around the vocal rule and i would probably be a part of a vocal effort in the congress and senate now if i were elected to the senate to try to fix that. >> all right. still to come, the race for the white house heads to illinois tomorrow. we'll talk to former new

hampshire governor john sununu. we're coming right back. sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. oh! [ baby crying ] ♪ what started as a whisper ♪ every day, millions of people choose to do the right thing. ♪ slowly turned to a scream ♪ there's an insurance company that does that, too.

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welcome back to "squawk box." making headlines, bernstein is down grading sprint nextel to market perform. the firm says sprint's risk of bankruptcy are rising, though it is not predicting the event. i got hit with tons of e-mails about this. they essentially go to a sell rating, $1.75 price target on the equity. then they come out and say we're not predicting a bankruptcy but we're looking at the cash flow and essentially saying not out of the question. an impact on the equity but very important because many people know sprint has done a major refinancing recently, a lot of bonds out there. obviously the bonds will be impacted today as a result of this call. >> i'm going to throw an idea

out at you. this is apple day. if they did go bankrupt, who would be a huge creditor? apple made a huge deal to commit to buy iphones over the next three years and spend more money than they even have do this. it would be an interesting situation. maybe mr. cook should hold a little cash back when he's thinking about his dividend and think about sprint. i don't know. the gop presidential candidates are battling it out in the land of lincoln this week. the illinois primary is tomorrow with 54 delegates at stake. here now with his outlook, john sununu, former new hampshire governor. governor -- >> good morning. how are you today? >> i'm good. i heard you -- in your words i don't know if you said you were going to throw up or vomit. i don't want to use the wrong phrase this early in the morning. but i gather that when you heard that santorum was doing these robo calls to democrats, that was your reaction.

tell me more about that. >> well, you know, that was santorum's phrase about he used that in the campaign and i just used it back to him. but look where we are. we have mitt romney coming out of puerto rico winning well over 80%. he's got tons of delegates and santorum still insists that he's going to go and try and create chaos by having a chaotic convention as his only solution. santorum is playing with obama's playbook and i think it's a problem and that's what made me respond that way. >> is gingrich even a player at this point? is this screwing anything up or does it even matter? nonevent anymore? >> well, look, both gingrich and santorum are counting on chaos. you know, that's just a reflection of two big egos who care more about themselves than the party and america and are sitting in the game only to create confusion. i think that's wrong. i think this country deserves a

nominee who can beat obama and a nominee who when he gets to the white house can fix the problem. and i think santorum and gingrich both fail on both counts. >> governor, haired formd. >> harold, you're beginning to sound like a republican. >> my donation history doesn't suggest that. is newt gingrich not your best friend in this race? do you believe when rick santorum says if newt gingrich were to exit this race you'd have a head-to-head matchup between santorum and romney and allow the conservative forces in the party to have a singular voice and singular candidate to rally around? >> i don't buy into that theory. i think the quicker this thing gets weaned down, the quicker this thing ends. i think you're going to see in the next two or three weeks a series of victories by mitt romney that the republican party wants somebody that can solve

the problem. santorum said yesterday we don't need somebody who can manage out of the white house. this shows how little he understands. he first blames president obama for mismanaging and then says you don't need somebody who can manage right. he's committed to hot rhetoric and he has the same background as president obama, a life long legislators. if you'll excuse me, harold, i don't think that's the right preparation for being president. i think you need somebody with executive experience and i personally think you need somebody who has been a governor and made hard decisions to reduce the size of government. >> i know governor clinton and present appreciates that endorsement. >> bill clinton is a great example on the democratic side. ronald reagan is a great example on the republican side. they came into this thing, think think they were both much better presidents because they had been governors. >> sir, what would you like to see tomorrow in paul ryan's budget proposal? >> i'm sorry, i didn't hear what you said? >> what would you like to see in paul ryan's budget proposal?

>> paul ryan has taken the lead on putting proposals that make the hard decisions. he's talked about the requirement for entitlement reform. he got a lot of grief from both santorum and gingrich over that, but i think it's what this country needs. he's talking about cutting spending and he's talking about putting a path out there that requires hard decisions for reducing the size of government. and i applaud paul ryan for what he's done and i thank paul ryan for having endorsed governor romney's package when governor romney put it out. he said it was kind of thing that this country needs. and i think the tandem you need to solve the crisis that president obama is leaving the country in is a president like mitt romney and leadership like paul ryan that will ram through the kind of changes we need to reduce the size of government, reduce spending and get debt, this multi-trillion dollar debt we have under control.

>> governor, the health care debate before the supreme court in the coming days, how do you explain the differences between president obama's health care plan, which i support, and governor romney's health care plan in massachusetts? there seems to be a tension between the santorum and romney campaigns in that santorum continues to say that governor romney's health care plan was inspiration for the individual mandate that is now under consideration and up for constitutional discussion before the supreme court? >> i think the difference is called the tenth amendment. you know, one time when i was chairman of the nga i suggested a five-record amendment to the end of the tenth amendment that said "and this time we mean it." and i think that's what we're going to start seeing, not on with the decision on obamacare but i think there's a sense in this country and i think you've seen that as part of the debate on the republican side that we've got to start downsizing the federal government, giving

more assistance and responsibility back to the states. i think that's the principal difference, that the obamacare mandates on a national level and fails to understand that the constitution leaves those kinds of decisions to the states. what governor romney did in massachusetts was deal with an 8% problem in his particular state in one particular way that fit that state and governor romney has said clearly that package does not fit what the national need is and the first thing he's going to do when he gets to be president is get rid of obamacare. >> governor, we're going to have to leave it there. john sununu, please don't throw up but thank you for being with us. >> that's sickening. >> still to come in the next half hour, we'll talk to jim o'neill, chairman of goldman sachs. he'll tell you where to get the best return on your investment. "squawk box" will be right back.

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"squawk box "making headlines, target has completed its $10 billion share repurchase program. it will continue too repurchase shares. this year target expects to invest another $1.5 billion or more in share buybacks. still ahead, you don't want to miss the next half hour of "squawk box." an exclusive cnbc fed survey. and two squawk masters of the market, neel kashkari and jim o'neill. we're cracking down on medicare fraud.

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welcome back. we're releasing an exclusive cnbc fed survey. the markets doesn't expect the fed to remain on hold through 2014. our senior economics reporter joins us with more. steve, it's great to be this side of the pond with you for

once. >> i don't have to shout quite as loud this time, ross. that was a joke, ross. >> that was good, yeah. >> ross, along with the idea that the fed's not going to make it to 2014 keeping rates on hold comes with a better economic outlook. particularly what we've been asking the last several months is the probability of a u.s. recession over the next 12 months. can you see how high it was in august amid the showdown over the budget. 36% in december thought there was a 36 probability on a recession. that's come down steadily and now we're at a low for this survey, just 19.1% probability by our market experts. 67 people responded, about half of them economists money let's move on and look at the single biggest threat facing the u.s. economy. not what you think. only 4% said slow job growth, inflation is on the mind of only 4%. what about the euro recession? it's just the third biggest

problem, biggest threat to the u.s. economy. gas prices coming in at 26% and then taxes and regulation at 36%. other 11%. i want to show you what those are. deleveraging still a threat, weak growth, tight monetary policy is another and something getting a lot of play these days, the fiscal cliff. what happens if december and january when the bush tax cuts expire and the sequestration for the budget takes hold. a lot of concern among economists and wall street over what happens in january and december. what about the chance that high oil prices by themselves will cause a u.s. recession. we asked that and the average turns out to be 24%. you can see this is the distribution. a lot of people putting it at 30% and then the tail comes around. 24%, a one in four chance that high oil prices by themselves cause a u.s. recession. the gdp forecast not as changed as i would have thought. look compared to our january survey, pretty much on track with 2012.

what's interesting about that is we're starting off with a weak first quarter. 2 .75% expected now for 2013. i want to go back to the issue we talked about in the last hour. when will the fed first hike interest rates? bernanke's been a little bit successful in shifting the distribution to 2014 but you put '12 together with '13 and 55% think it will be raised before 2014. if you slice that a little more carefully you'll find before the fourth quarter of 2014, 80% or something like 90% believe there will be a hike. >> stay there one second. the news is out, it's going to be a dividend and a share repurchase program. >> and it's a $10 billion in total. >> $45 billion over three years. >> just 10 this year? >> the company will initiate a quarterly dividend of 265 a

share. they've authorized a $10 billion share repurchase program starting fiscal 2013. that will begin september 30th. that will be executed over three years. >> what's the percent and on that by the way? what's the yield? >> i guess you'd have to look -- $45 billion they anticipate will be utilized of their domestic cash in the first three years of our program. this is now on the apple statement that's just hit the wires. the company will have a conference call discussing the plans at 9 a.m. >> $2.65. the estimate was between $2 and $3. so that's going to be generally in line. but look at the action premarket. >> gary, does it pass your sniff test? >> the big issue is what it's going to be long term. what's the projection out? is it going to grow? >> i'm interested in how much is going to be put in people's pockets this year. that's another issue out there. when microsoft did that

dividend, it actually shows up in the national accounts as a spike to income in the quarter that it happened. >> which is pretty incredible. >> it's one of the few things a company has ever done that shows up in national economic data. in 2004. >> we'll have to look at july 2012, see if that makes an impact. >> how widely held is apple so that it ends up being something like a meaningful addition to income. >> they don't specifically talk about distribution growth, which i told you was going to be a focus. but what they do say is we've used some of our cash to make great investments through increased r & d, acquisition, new retail store openings, strategic repayments and supply chain, building out infrastructure. you will see more of all these in the future. i guess in terms of capital allocation, you're getting a little bit of everything, maintaining a cash balance,

having a distribution, buying back shares -- >> to put this in context, we're talking about the amount of cash this firm will have on its billion sheet by the end of this year. >> let's be clear, andrew. a company typically boros against the cash balance to do m & a. i know you said earlier apple is a unique event but the question becomes are we at the beginning where companies are a little more comfortable holding a little less cash? >> this is a one off. i think with apple you can't read through but there will be criticism that this is not enough because of the amount of cash that they will generate and i think there will be those that i guess we want to call them

aggressive growth investors looking for more of a shareholder distribution as a result of this. now bob doll was on earlier today. i asked him, he said he does believe there's a lot of portfolio managers who were waiting to hit the buy button, to push it based on this. you're going to see now. you have doug cass on the other side who had pointed out if you go back to microsoft and look at the redeployment in capital in 2004, it was significant underperformance. >> i want to take a time-out for a second. we have stephanie link on the telephone right now. she is from thestreet.com. stephanie, you with us? maybe? maybe not. she's not with us. >> apple shares below 600 on this news. a bit of softness compared to where we were earlier in the morning. >> did we get everything? >> what do you mean?

did we hit the trifecta? we got the buyback but we didn't have the deal making. >> they said they still have the war chest so they can still do the deal. >> typically the way things work, ross, is institutional investors make their sentiment known early. somebody says i buy this stocky get x in free cash. >> on the buyback, remember that the buyback is expected to be executed over three years and this is important, the primary objective of the buyback here is to basically neutralize the impact from future employee equity grants and future employee stock purchase. the buyback will absorb some of these shares that would have been created. so essentially the shares will be repurchased and neutralize the incremental distribution of new shares.

in many other companies that would have been a meaningful thing in terms of capital structure. not really meaningful here but it will be something that is at least a net positive. >> i want to go back to the question asked at 6:00al this morning. is this now a mature company? does this say something larger about where apple is as a -- >> answer that question yourself, andrew. do you think apple has anywhere near the end of its product psych snl it came out with an ipad 3 which created a huge sensation. it didn't even do the 5, it did the iphone 4s. >> you have the ipad 2 and you have the ipad 3 coming out on wednesday. >> how come no one ever talks about the competition? >> we try to think about, we do our all-america economic survey, we're going to ask again do you own an apple product.

we did it in december. it was like 17% of the public owns an apple product or expected to receive one for christmas. you tell me another company i can ask that same question of. samsung? microsoft? >> in terms of products. >> we have to remember this on a relative basis. everything else being equal, great capital allegation, huge announcement, net positive. but there was a lot of expectations built into this. apple is its own asset class and there's a huge amount of built up expectations. >> and therefore people will sell on the news. >> i'm not sure. >> but no, that's the question. >> we showed the stock, i'm not sure whether this is active trading guidance. >> it may have been halted. >> we're showing it up, that may have been a premarket trade. >> let go to courtney reagan,

who has been looking at the details. >> the shares actually are halted. they've been halted probably about two, three minutes before the press release came across the wire. so in anticipation this announcement was going to come before we got the details on the call. yes, they are spending this money and it was expected they're going to give a dividend. there's still a lot of cash left on that table and a lot that can be done with that cash. there are still lots of options on the table. we need to remember that. if i can weigh in on that mature conversation, i don't think apple is mature. if you look at the marketplace, there is still so much room to grow, the product life cycle they could still develop. we thought apple was done a long time ago when their computers just weren't selling like we anticipated and then here comes the ipod and that totally changed the game. >> at a price of about $600, we're still talking about a dividend deal of less than 2%. so it's not a huge number. it's a dividend which again for tech is bigger than say the

nasdaq, which isyielding, what 1%? but when you talk about expectations, how much was prized and is it now? >> on this conference call you will absolutely undoubtedly get the question about distribution growth, how is it going to grow? >> you have a good point, though, about managers who put stocks into buckets. and when a company confuses the buckets, it confuses the manager. i think one of the things you're getting at, do people sell a growth stock because it has a dividend? does that become anethema to this group of investors? >> if you go back and you're a momentum growth investors and you have a technology commonwealth, back back to 1999, 2000, history said if we saw any sign of slowing topline growth or any signal the business was maturing, we're out. this is very different.

but in terms of the dividend yield, again, the most important thing for the growth and income investors will not be what the yield is today. are they committed to a growing distribution. >> my friend joe is on the line explaining what morgan stanley, your firm an analyst just put out in the last ten years the top one third of tech stocks ranked by dividend yield have outperformed the bottom third by 14% on alf raj while more recent years high dividend payers in tech have traded at a multiple premium to low -- take microsoft out of the equation and maybe it does make sense. >> it echos what happened in the market. last year the positive return for the s&p was basically generated by dividends. >> stephanie, who did join us earlier, is now on the phone. we talked about this idea of what could possibly come. your thoughts and do you get the sense that it was a huge amount of expectations built in here

and maybe that's why we might not get the kind of move that some thought? >> yeah. we talked about could it be a dividend, a special dividend ash buyback, a stott split. there's a lot of different options on the table. we got the dividend equivalent to about 2%. and that is a little bit better than some of the large cap tech peers like ibm, hewlett packard, et cetera. the buyback is a positive. i think to your point, gary, the stock is up $100 in the last five weeks. we could see a little bit of sell with the news but i think this is very, very bullish. they've got a lot of cash still in their coffers to spend. >> one of the things happening with this stock in the last couple of weeks have been these weekly options given where the stock price is. you've had huge speculation day in and day out in the trading of the weekly options. was a lot of that, in your opinion, predicated not necessarily that they knew this

call and announcement was going to be today but in anticipation of something before let's say july 1 sfs. >> oh, yeah. i as we talked about this morning, tim cook was vocal about saying they were going to be make some sort of decision. there were expectations something was going to happen. i think this is a little better than what was expected. they're going to continue to use their cash to spend to grow. >> one point if could i. we talked about $45 billion over three years and then we talked about $10 billion as the repurchase. it is not 45 plus ten. it is total. >> 45 is the total capitalization. >> does this mayor eight sunday evening announcement, an 8:30 press release and a 9:00 conference call? >> again, if this was any other company, the answer is no. but when you have your own asset class, which unfortunately or

fortunately this has become, the answer is they have to. >> how long can you stay a unique asset class you think? >> oh, gosh, that one -- write in, folks, tell us. >> they have products to back it up. >> in an open market, a higher than normal rate of return will not stand. the question is whether or not they have such a lead and have gotten so engrained in the psyche. what i think is so interesting is unlike the hold that ibm seemed to have on corporate purchasing manager, blackberry lost this hold. i wonder when you talk about is if a mature company, the idea that here at nbc thiel support the iphone along with the blackberry, that's new. maybe our guest wants to talk about that of corporate accounts is something that's in apple's future. >> i'm sorry, is this for me? >> it's for you, steph. >> you know, i think it could be pip mean, again, this is a

company that, you know, held it very, very close to the vest in terms of what they were doing, in terms of products, in terms of cash, what their plans were. and so now all of a sudden you've got new management and a new regime and a new strategy. i think that overall this is good news. they're definitely getting more transparent. i think that's a very positive thing for the long term. >> think about the $10 billion repurchase. many people in the business right now can remember when the entire market cap was less than $10 million. so $45 billion being redeployed -- look at the chart. this is going to be fascinating. for months people have talked about they initiated dividend, you're going to see a slew of new institutional buyers. we're going to be able to see over the next several weeks wlo in fact that's going to happen. >> steph, we got to run. real quick what would steve jobs

think today? >> i think he'd be pretty proud. he build an empair and now they're using the success to try and bring shareholder value in a lot of different ways, not just product and growth and earnings but also through cash distribution. >> we're going to continue to follow apple in advance of that 9 a.m. conference call. but joining us now, neel kashkari. great to you have this morning. i was going to talk to you about a hundred other things but since we're on the topic, a, do you guys own any apple and, b, what do you think? >> we don't own any apple in our active equity accounts, not yet. but we definitely like dividend paying stocks and as gary said, companies committed to growing their dividend overtime. we've been taught you can either have a dividend paying company or a growth company but that's a

false choice. emerging markets had higher yield and nobody would argue that china is not a growth market. so we'll absolutely believe growing dividends a an attract hif opportunity to investors. we're going to have to see apple will grow its dividend overtime. it certainly makes the company much mover interesting from our perspective. >> where are you at the market now? if you look at the market for last week or for this year, i keep wondering if the train's left the station and if you weren't on board, you missed the ride. >> obviously the markets are up about 12 percent this year. while we're breathing a sigh of relief from europe, we don't think those long-term risks have been solved. we're finding individual companies that we do like all the way around the world in america, in emerging markets. we're being very selective on which companies we're buying. we like companies with

attractive prices, like dividend payers, those with strong balance sheets. all the risks have not been taken off the table yet. >> our fed survey shows markets looking -- don't really believe the fed will remain on hold since late 2014. they're looking for a rate hike before then. they're upgrading their view on the economy. what's the view on pimco? >> we think the fed is going to stay low till late 2014, as bernanke said. we believe qe3 is coming. right now people can't see any cloud on the horizon. a few months ago the world seemed like it was coming to an end. our percent is around 2% gdp growth. it's better than zero but it's not what we were used to. >> what brings the fed back in?

is it just slow growth? >> it could be equities repricing, other asset prices coming back down. every time the fed takes their foot off the gas or hints at it, risk prices start to fall again. we think the fed will need to be active. that also could force their hand as it bleeds in the mortgage market. >> neel, apple has begun trading again. it looks like we are flat at about 5.885 -- oh, that's still the old. gary, you said it started trading given? >> it looks like it's trading 592 in germany now live where it's not holding. we're just trying to confirm in germany. >> that compares beautiful it was halted. this nasdaq quote shows a price

of 599. >> you're talking about now everybody's acting as if there's no clouds in the sky. how long does it last for and what are the cloud that come back. >> i think it lasts from weeks to months. some of the cloud coming out of europe, we have elections coming up and we do not believe is going to be able to deliver the you a start measures promised. then european policy makers will have another hard choice. we believe portugal is next in line. they're going to need another bailout. europe is going to face tough political choices. so we're very focused on managing that down side. >> neel, harold ford has a question for you. >> the tax cuts, regulations and oil prices were the biggest concerns. how are you all grading those and how do you factor that into

your investment decision? >> i think those are exactly right. we're very nervous about oil. we don't know how to estimate how investment? >> i think that's exactly right. we're very nervous about oil or how likely it would be an attack in iran. that could be a big shock to the economy. the fiscal cliff was focused on the good news, harold, as you know, republicans and democrats can usually agree to perpetuate the status quo even if it's meaningless or doesn't make any sense. our best guess is that there is a risk we're focused on. >> real briefly -- >> the 585 print. >> in germany it's on the money. >> i guess you call it mature growth companies which sounds like an oxymoran to your fund manager.

who else fits in there? >> it's a huge company. it's got an extraordinary culture of innovation and generating massive amounts of cash flow. there are companies truly innovative that generate massive amounts of cash. >> neel, you know when i referred to the asset class, i refer to it in the sense of those portfolio managers who have opted to own the stock or not own the stock looking at it as an asset class, not necessarily a commentary. i think you get my point, right? >> i do get your point. but, again, from our perspective, growth and dividends are not mutually exclusive. we love companies that are growing their dividends over time. and so it's great to see apple do this and we hope other american companies, even high-growth companies will follow in their footsteps. >> and by the way, just as i had

said -- i'll give myself some credit. when it was printing 600, i said distributi distribution, important. the most important is whether it will grow over time. >> because as neel pointed out, they will discount it back looking at the total value of the business and growth of distribution. >> and to put this in perspective, free market apple is trading at 608. we're down from the close on friday. >> so i got lucky. >> steve, good call. >> always good call. >> i want to know, is the lack of a some one-time special dividend some one that -- were they thinking that it was going to be -- >> some one dividend would have been even worse. >> i wonder if that's something -- i did get some commentary from folks saying that they were looking for more. >> neel, thank you. i know there were some stocks that you wanted to talk about.

we'll get to that next time we see you. >> still to come, much more on our story this morning. apple announcing that dividend and market share buyback. market reaction is next. [ beepi] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions... [ beeping ] ...to bring all the right results. it's the at&t network -- doing more with data to help business do more for customers. ♪ 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.

well, of course, that is your stock of the day, apple. a lot of the news out. the conference call will answer questions in regards to not just about the distribution but the distribution growth. our guest today was harold ford. a monumental day for those who own apple. any closing thoughts about the world economy? >> these guys at apple are smart. the board is smart. let's see what this conference call says. but i think your points were the right ones. i think it will be interesting how they answer about growth. >> $10 billion in repurchases is really not actually helping -- it's not really going to be going into your pocket. >> there's two ways to look at it. >> sterilized qe. >> those options were going to be exercised. there were going to be new

shares. those trying to say this company is not being aggressive enough will say, just basically shrinking that number of shares outstanding is not a bold enough move. >> and then you're down to $35 billion and that's what this becomes. >> you talk about the growth of dividend is going to be the key. so what kind of growth would make you or an asset manager -- >> well, in my former life, those are -- if they come out and say we believe there's 265 distribution dividend as a beginning, we look out the next three to five years. we can grow that 13 to 15% per year. as an example, as income-oriented investors will look for the total return, that's the kind of thing to harol harold's point -- >> you've got to expect that to be the first question. >> what about this bucket idea that steve gets to? you could see certain groups not buy and other groups buy.

you don't see that? >> there's plenty of companies, if you look at the mlps as an example, they are growth and income investments. that's -- i don't buy that. if you can identify a company and you can't put it in a bucket, well then shame on you. >> let's remind people real quick, the volatility that we've seen, premarket trading. we've gone from a premarket high of 608 and a low of joining us, we'll have him back on a nonapple day. harold ford, thank you for being here. >> thank you. i've enjoyed it. >> it's been lots and lots of fun. gary ross coming over from london. >> kelly, good stuff. i felt like coming back from vacation it would be becky but you guys made it all work.

make sure you join us tomorrow. "squawk on the street" begins right now. good morning and welcome to "squawk on the street." i'm melissa lee along with jim cramer and brian sullivan. big news from ap people about what it plans to do with its cash hoard. they are going to set a dividend of $2.65 per share. they offered a buyback program commencing in the company's fiscal 2013 which begins on september 30th of this year. apple holding a conference call shortly. in terms of the premarket action, very roller coaster ride. we have seen in premarket action apple shares go as high as 608, so